The National Farmers’ Federation (NFF) is calling on Coles to demonstrate how its latest campaign slashing the price of fresh fruit and vegetables is not going to impact on the farm gate prices for Australia’s food growers.
NFF President Jock Laurie said that on the day the UN has released its latest report, warning of the risk that not enough food will be produced to feed the world’s booming population, Coles has announced that it is cutting fresh food and vegetable prices.
“The UN report shows that demand for food is expected to grow exponentially, and production must increase in order to keep pace,” Mr Laurie said.
“Yet at the same time as the UN predicts that demand is soon going to exceed supply of food, Coles has chosen to slash fruit and vegetable prices.
“The UN estimates that within the next 20 years, the world’s population will need 50 percent more food.
“The simple fact is this: unless food production increases, demand for food will outstrip supply, which means the cost of food will increase for consumers at home and abroad.
“What is urgently needed is increased investment in methods to increase food production, and sensible decision making around policy areas that threaten agriculture.
“Ultimately, unless we can find a way to sustainably increase food production through such measures, consumers can expect to see food prices escalate as supplies fall further behind global demand.
“Perhaps most importantly, we need consumers to understand that a cut in their fresh fruit and vegetable prices may be good for their hip pockets in the short term – but not necessarily positive for the farmers who grow the produce.
“We are seeking iron clad guarantees that farm gate prices will not be slashed in line with this pricing decision by Coles,” Mr Laurie said.
Riverina Citrus Chairman, Frank Battistel has also expressed concern about who will ultimately benefit from the announcement Coles will heavily discount fruit and vegetables.
“The question really is who will end up paying for these discounts in this latest price war,” Mr Battistel said.
“Either Coles is charging its customers 50% too much for fresh fruit and vegies or these discounts will be cross subsidised by large margins on other products.
“Citrus growers are already having to sell our produce at record low prices there is no way we can reduce them further.
“Some of our growers are already selling at a loss; it’s a very hard time for our growers especially with the lack of export opportunities due to the high Australian dollar.
“This announcement will be a huge concern for many small fruit and vegetable stores across the country that simply cannot compete with the devastating power of Australia’s two massive supermarket chains.
Mr Battistel says Coles and Woolworths entry into selling fuel killed many small independent service stations and he is concerned this will happen with small family owned fruit and vegetable outlets.
“That would be a very bad outcome,” Mr Battistel said.
“At the end of the day we lose even more competition, the supermarkets get bigger and more powerful and farmers have fewer options for selling their produce.
“These big supermarkets should put more effort into supporting Australian farmers by offering fair prices and promoting 100% Australian produce over inferior imports rather than trying to beat each other up in the chase for profits,” he said.
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