Coles and Woolworths have been subpoenaed to provide evidence at this week’s ACCC hearings as part of their inquiry into supermarket practices.
The NFF Horticulture Council is urging the ACCC to focus closely on these supermarkets’ actual buying practices and procedures.
“We have long maintained that these buying practices are exploitative and take advantage of growers due to the perishable nature of their product,” said Jolyon Burnett, chair of the Council.
“Horticulture is a sector that provides 98 per cent of Australia’s fresh fruit and vegetables and underpins our national food security.
“Woolworths and Coles understand that growers have little choice but to sell to them due to their dominant market position-one of the largest retail duopolies in the developed world-and because their produce is perishable.
“Growers often have no option but to sell or risk their produce becoming worthless. As described by the ACCC, growers are vulnerable to “take-it-or-leave-it terms from buyers, or exploitative conduct”.
“There are almost no long-term contracts with the major supermarkets; instead, they prefer to buy every week, pitting desperate growers against one another. This practice has persisted for decades.
“Growers report that they haven’t received price increases for 15 years, while over the same period, the major supermarkets have continued to post record profits.”
Analysis of a major supermarket’s share price and dividends showed that over the last 25 years, it has delivered a massive 13% per annum return to shareholders. In contrast, superannuation funds over the same period have returned just 7.3%.
“For growers, such returns are a distant dream. Given the billion-dollar profits regularly recorded by supermarkets, it would be reasonable to expect their main suppliers-the farmers-to share in some of this growth,” said Mr Burnett.
“Unfortunately, this hasn’t happened. Instead, farmers’ productivity gains over this period appear to have been gobbled up by the supermarkets, representing a generational wealth shift from farmers to a select group of senior executives and shareholders.
“The NFF Horticulture Council is calling on the government to stand ready to respond to outcomes of the ACCC inquiry and take decisive action on supermarkets to ensure fair outcomes for both growers and consumers.
“This could include an immediate cap on further market share growth, including all forms of vertical or horizontal integration. The supermarkets are big enough already.”
