Transport costs and isolation from major markets are among the key issues remote growers in northern Western Australia want addressed by the Australian Competition and Consumer Commission’s (ACCC) inquiry into the supermarket sector.
But some growers in the Gascoyne are not as critical of the major chains as their counterparts in other regions, with one producer saying they offer the best prices despite variability in the market.
Another grower told the ABC the blame for gaps between farmgate and check-out prices should extend to all retailers rather than solely the major stores.
The 12-month ACCC review was announced by the federal government last week amid claims from farmers and primary producers the food supply chain model gives supermarkets too much power.
The wide ranging probe was announced as concern grows about rising costs for groceries, and will in part examine differences between farmgate prices and check-out prices.
Australia’s two major supermarkets Coles and Woolworths have both previously said they would work closely with the ACCC as part of the inquiry.
Widespread price gaps
Carnarvon grower Phil Frzop said prices for his produce such as eggplant were regularly marked up once they hit shop shelves, but felt it was unfair to solely blame the major supermarket chains.
“I’ll be doing eggplant and I’ll be getting for a box of 14, maybe $18 or $20 this last season … and there’s $8 a kilo down in Perth,” he said.
“How can you justify us getting $3 a kilo and then selling it for seven or eight?
“It’s not just Woolworths and Coles, you know. They are picking on the big two.
“It’s across the board. You walk into any store in Perth and see what the market price is, and to see what their mark-up is and what they’re selling it for — it’s just crazy.”
Carnarvon organic grower Byron Sutcliffe previously supplied produce for the conventional market, which he said had a higher price ceiling but was “volatile” compared to the organic market.
He said in the conventional setting, the major supermarkets generally provided the best price for his produce.
“There’s just a pretty constant price [in organic] and that’s [because] the supply and demand of the organic is a lot less,” Mr Sutcliffe said.
Isolation creating high transport costs
Melons Australia represents growers based across the country, including in WA’s Kimberley and Gascoyne regions.
Executive officer Johnathon Davey said the ACCC inquiry would examine problems throughout the supply chain, with many growers across Australia not getting paid above the cost of production for their goods.
Mr Davey said this gap in the melon sector was due to rising production costs, while the price retailers paid had not moved for several years.
He said isolation leading to high transport costs was a major contributor in WA’s north.
“[The sector wants] a good appreciation on the cost of production to cover transport costs and other issues,” Mr Davey said.
“How do we make sure our growers are confident about what they’re going to get paid and when they’re going to be paid?”
Mr Davey said there was a growing number of melon producers in WA sending their goods to buyers interstate, but the long travel times meant prices fluctuated while the produce was in transit.
“You’re looking at three-to-five days of transit before it even gets across here … and within that period the costs they’re getting paid for that fruit could well change.”
He said the ACCC inquiry needed to remove a “fear of retribution” that prevented producers from speaking out if they felt they were not getting a fair price from the big chains or wholesalers.
“Most growers are not comfortable in speaking out about what it costs them to produce and how much they are getting paid for it,” Mr Davey said.
Key stories of the day for Australian primary producers, delivered each weekday afternoon.
