Northern Victorian vegetable growers are ploughing-in their crops because supermarket chains won’t pay a sustainable price.
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Toolamba grower Ross Marsolino said he had lost all trust and confidence in the big supermarkets after enduring price cuts which left him unable to profit from the food production.
He is particularly annoyed because he can see the big profits being racked up by the food retailers.
Just recently he ploughed 38 ha of zucchinis back into the ground after being offered $1.60 to $1.80/kg.
He said Coles and Woolworths were selling them for $4.99/kg.
Mr Marsolino, who is a former wholesale merchant, has three more hectares of zucchinis he is contemplating harvesting, as prices have recovered in the past couple of weeks.
But his plans to sow more in the next few months are on hold as he contemplates whether it is going to be worth the trouble.
“Right now I’m not interested in planting anything more. There’s just no future in it.”
Mr Marsolino contends that if the big supermarkets reduced their margin and brought down the retail price, more people would be buying the vegetable and demand for his product would escalate.
“If Coles and Woolies and Aldi brought down their prices, we couldn’t keep up with the demand.”
He said the prices being offered to farmers for produce were ridiculous when farmers had to absorb escalating chemical, fertiliser and labour costs, as well as packing and transport costs.
Yarrawonga vegetable grower James Kelly has about 700 tonnes of onions in his coolrooms he can’t shift.
His agent has offered only 40¢/kg, while supermarkets are selling them for $3 to $4/kg.
His only defence against a financial loss is to scale down his operation. Instead of employing up to 50 people he will have only a handful on the property.
This year’s price offers are hitting rock bottom for the producer.
“It’s been getting worse and worse, so much that growers are getting out of the industry,” Mr Kelly said.
“If this continues then Australian growers will leave, and supermarkets will have to import frozen vegetables, and that might suit them because they won’t have to handle fresh produce.”
Just a few weeks ago, the Kelly family business had to plough into the ground 12 ha of cabbages he couldn’t sell for a decent return. He was offered 60¢ cabbage, while they were retailing at about $6.
Coles and Woolworths will face a parliamentary committee into price gouging and record profits next year.
The Senate will run an inquiry into the impact of market concentration on food and grocery prices and the strategies retailers employ.
“This inquiry represents a critical opportunity to reassess the balance of power in the grocery sector and propose reforms that will drive down food and grocery prices,” Greens Senator and inquiry chair Nick McKim said.
“Our objective is to break their overpowering influence and bring down grocery prices for all Australians.”
Coles chief executive Leah Weckert said the company was working to reduce cost-of-living pressures for Australian families and it would engage with the committee to explain the factors that influence supermarket pricing.
“Coles’ total supermarkets’ price inflation declined to 3.1 per cent for the July-September quarter,” she said in a statement.
“Fresh food, including fresh produce, meat, deli and seafood, experienced deflation of 2.3 per cent during the July-September quarter.”
Woolworths Group chief executive Brad Banducci echoed Ms Weckert’s comments, saying the company would explain to the senators that there was economy-wide inflationary pressure and customers and suppliers had competing needs.
“As we have done at several inquiries this year, we will openly and constructively assist the parliament with its work on this important topic,” he said.
Agriculture Minister Murray Watt said it was time for supermarkets “to do their part” after recently recording massive profits.
A final report will be tabled in May 2024.
Whose Christmas is it?
Prior to Christmas, Coles was promoting a carrot giveaway, provided by five growers.
Up to Christmas Eve, Coles customers could collect a free ‘reindeer carrot’ from a designated collection point when exiting their local Coles store, ready to leave out on Christmas Eve for Rudolph and his fellow hard-working reindeer.
Five growers donated more than 50 tonnes of Santa’s reindeer’s favourite snack.