Flood-affected farmers have rejected supermarket calls to cut their prices, saying they have nowhere left to go.
Skyrocketing costs of energy, fuel and fertiliser, rising inflation and interest rates and successive natural disasters have left many farmers desperately clinging on to their businesses as they try to produce food for Aussie families. Yet major supermarket Coles decided to turn the screws on suppliers, The Australian reported this week, discouraging them from asking for a price rise.
“All businesses will incur impacts to the cost of doing business at some point,” a note from Coles to suppliers read. “Even where you can substantiate increases to cost of doing business including rising cost of inputs, Coles may not accept your request for a cost increase in full or at all.” The note went on to say: “Your organisation needs to be continually reviewing how you operate to offset costs.”
However, Coles did encourage suppliers to pass on savings if supplier costs decreased.
“Coles considers that where there have been decreases in commodity input costs for suppliers, these should generally be reflected in cost reductions to Coles,” The Australian reported.
NSW Farmers Vice President Rebecca Reardon said a large business putting the burden of rising inflation on smaller businesses was yet another example of how Australia’s competition system was broken.
“Coles made more than $1 billion in net profit after tax last financial year, yet the farmers fighting floods to harvest food and make ends meet are somehow the ones who should be cutting costs,” Mrs Reardon said.
“Farmers simply cannot afford to take a pay cut, there’s just no margin left, and this sort of behaviour will simply drive farmers out of business and further constrain food supply.
“It is plain our system is broken, and the Federal Government really needs to get cracking on competition reform because this is unacceptable.”
Many Australians do not see the extraordinarily low prices paid to farmers, Mrs Reardon said, suggesting if supermarket bosses wanted cheaper produce, “they should roll up their sleeves and come help with the harvest”.
“One of our poultry growers told me recently they get paid just 72 cents for every chicken they raise for their processor,” she said.
“That 72-cent bird goes through the supply chain and becomes the BBQ chicken in the supermarket – the same BBQ chicken that Coles wants to take a dollar off to help fight the cost of living.
“We’re not saying farmers are the only ones doing it tough – we’re all sharing the pain on electricity and fuel prices – but there simply is nothing left to give on this side of the supply chain.”
