Amidst rising concerns over Australia’s staggering food waste, vegetable growers are sounding the alarm on the detrimental impact of supermarket duopoly agreements, alleging that non-binding contracts contribute to significant oversupply and subsequent waste.
A recent report revealed that Australians discard approximately 7.68 million tonnes of food annually, a estimating roughly 312 kilograms per person. According to peak vegetable grower groups, the dominant market presence of Coles and Woolworths exacerbates this issue.
A vegetable grower expressed fear of retribution from the supermarket giants, stating, “Our biggest customer is the rubbish bin.” The sentiment resonates across the industry, with 34% of growers reportedly contemplating abandoning their farming businesses due to the dire situation.
AUSVEG, representing thousands of vegetable growers, highlighted the problematic nature of supply agreements where supermarkets forecast weekly volumes without obligation to fulfill them. Growers often find themselves forced to dispose of surplus crops or sell them at significantly reduced prices due to inadequate orders from retailers.
The manipulation of markets through these agreements has raised serious concerns among growers, who believe deliberate distortion tactics are at play. However, restrictive clauses prevent growers from discussing their supply arrangements, leaving them with little recourse to address the issue.
Additionally, rejected produce due to stringent specifications further exacerbates waste, costing farmers an estimated $30 million annually. Suspicions linger among growers regarding the rationale behind these rejections, with some attributing them to supermarkets overestimating demand.
While Coles and Woolworths assert their commitment to supporting growers and reducing waste, calls for action to address the power disparity persist. Peak grower groups advocate for mandatory implementation of the Australian Food and Grocery Code of Conduct, proposing independent arbitration and stringent penalties for retailer misconduct.
As the debate intensifies, stakeholders emphasize the urgent need to overhaul existing practices to mitigate food waste and foster a more equitable relationship between growers and supermarkets.
Australia unable to ‘feed itself’ without supermarket reform
In a recent government inquiry into supermarket pricing held in Orange, NSW Farmers Association vice president Rebecca Reardon sounded the alarm over Australia’s food security. She emphasized that without significant reform, Australia could face a grim future where it cannot sustain itself agriculturally.
Reardon highlighted the challenges faced by farmers amid the dominance of Australia’s supermarket duopoly, stressing the risk of driving producers out of business. Beyond immediate economic concerns, she underscored the profound implications for the nation’s ability to feed itself.
Citing recent reforms in countries like New Zealand and Canada as potential models, Reardon advocated for comprehensive changes to Australia’s supermarket sector. This includes making the Food and Grocery Code of Conduct mandatory with stricter enforcement measures, enhancing price transparency, fostering competition by facilitating new supermarket entrants, and implementing divestiture powers to address market power imbalances.
She pointed out the imperative to curb the escalating gross profit margins of supermarkets and ensure accountability for unfair pricing practices.
As discussions continue in the inquiry, Reardon’s remarks serve as a stark reminder of the urgent need for structural reforms to safeguard Australia’s food security and support its agricultural industry.