Australia’s major supermarkets have not raised prices for some fruit and vegetable producers in 15 years, investigation finds | News Australia

Some fruit and vegetable producers have not received a price increase from major supermarkets for 15 years, and farmers are under pressure to fund recent price promotions, a Senate inquiry has found.

Speaking at the first public hearing of the supermarket inquiry, horticulture sector representative Jeremy Griffith said negotiating tactics used in the sector and low prices paid were contributing to the large-scale razing of orchards and an exodus from industry.

The National Farmers Federation council member said Australia’s food sector should not be “held hostage by a large corporate duopoly”, referring to Coles and Woolworths.

“That’s how serious the situation is at this point,” Griffith said, referring to stagnant supplier prices.

“The average age of each producer is becoming way too high because the next generation simply does not see a future in the agricultural sector. »

The Senate inquiry, designed to examine how big supermarkets set prices and use their market power when dealing with suppliers, held its first public hearing in Tasmania on Thursday, ahead of planned hearings in New Wales from South and Victoria next week.

There is also a separate 12-month investigation by the competition regulator.

Chaired by Greens senator Nick McKim, the committee heard the purchasing process was unfair, with supermarkets imposing a narrow price negotiation window for perishable products.

Griffith said fruit growers were also asked to reduce prices to fund a recent promotional campaign.

“From an audience point of view, it’s great. Supermarkets have read the tea leaves and are going to suffer the consequences on their margins,” Griffith said.

“(But) the producers were expected to finance this rebate or part of this rebate.”

Woolworths, which recently announced price cuts on hundreds of items including packets of bananas, pears and apples, said it was purchasing from its suppliers according to its usual practices.

“Our seasonal price drop program provides our customers with value and price certainty throughout the fall,” the spokesperson said.

“Even if the market price we pay to our apple suppliers increases, customers will not pay more this fall. »

Coles referred Guardian Australia to its response to the investigation, in which it said it benefited from partnerships with suppliers that had lasted more than 50 years in the fresh produce business.

“We greatly value these long-term partnerships, and our ambition is to continue to build on these successes and contribute to the long-term sustainability of our valued suppliers,” Coles’ submission said.

While big retailers have controlled two-thirds of the market for some years, farm groups said the recent inflationary period has highlighted problems with a lack of competition, with increased pressure placed on food producers.

Guardian Australia analysis has consistently shown that major supermarkets enjoy higher profit margins than before the pandemic, despite a cost of living crisis.

The committee heard on Thursday that food prices are now so high that Australians are resorting to rummaging through bins, stealing or skipping meals, while major retailers post healthy profits.

Campaigner and university professor Danny Carney said large supermarkets were often the only suppliers of essential goods, such as food and sanitary items.

He said some people were forced to search for discarded items in supermarket bins or steal them.

“The other way most people have the power to control their grocery bills is simply not to eat,” said Carney, of the Grassroots Action Network Tasmania.

“What really makes us angry is that the supermarkets are making more and more money as it gets harder and harder for the rest of us.”

The rising cost of living is particularly poignant for many Tasmanians given the state’s unemployment level is higher than the national average, creating particular pressure on young people.

Committee member and Tasmanian senator from the Jacqui Lambie Network, Tammy Tyrrell, said on Thursday residents do not believe big supermarkets are acting in the best interests of the state or country.

“What we heard this morning at the Hobart supermarket inquiry is horrific,” Tyrrell said.

“Young Tasmanians are digging through bins or shoplifting because the price of food at the supermarket is completely unaffordable. »