Growers group says supermarkets' 'abuse of power' forces farmers' hands

A public hearing will start tomorrow at ParkRoyal, Melbourne Airport, Tullamarine, for the Senate Select Committee's inquiry on supermarket prices.

The Senate Select Committee will hear from the National Farmers Federation (NFF), AUSVEG, Ritchies Stores, CHOICE, the Consumer Action Law Centre, Consumers Federation of Australia, Fruit Growers Victoria, EastAUSmilk, and the Global Centre for Preventive Health and Nutrition (GLOBE).

Fruit Growers' Victoria's submission said Coles and Woolworths were able to price set horticultural produce due to dominant market share, its perishable nature, farmers' financial needs and a fear of retribution.

"We are concerned that abuse of market power and unfair buying terms is making fruit growing uneconomic, with our members reporting being forced to sell fruit below the cost of production," the submission said.

"The price is set by the lowest price available, which is regularly below cost of production."

Its submission had figures including Coles marking up Granny Smith apples more than 100 per cent, and Woolworths 128pc and 134pc markup in November and December.

"The low buying prices of Granny smith has impacted the profitability at farmgate," the submission said.

"Most growers' average farmgate return for Granny Smith during this period has been between 50 to 60 cents per kilogram which is below the current cost of production."

The NFF will focus on market concentration and exercise of corporate power on prices, price setting between two major supermarket chains, and frameworks to protect suppliers.

The NFF's submission stated increasing concentration on the national supply chain could "dampen" farmers' long-term ability to increase efficiency and productivity.

Its recommendations included mandatory price reporting and disclosure, fair contract terms and access to assistance for farmers and small businesses.

AUSVEG's submission stated retailers were creating "excessive and unnecessary costs for the suppliers".

Victorian-based independent grocer, Ritchies, has more than 80 supermarkets and liquor stores across the east coast.

Its submission, written by the chief executive Fred Harrison, focused on property ownership and planning laws, and said Ritchies had been outbid by major chains on "many" supermarket sites.

It called for stronger merger laws.

CHOICE, a not-for-profit consumer advocacy group, also suggested support for merger reforms and to introduce a ban on unfair trading practices.

Its 48-page submission included transparent pricing and the cost of essential items in regional supermarkets.

Common themes between the recommendations included the ACCC requiring "greater power" to investigate industry complains, and changes to supply contracts for better suitability.

There is a public hearing at Orange, NSW, today with submissions from NSW farmers, a producer panel, Cattle Australia, Dairy Connect, Greenlife Industry Australia and more.

More information on the public hearings can be found here.