Farmers and families at mercy of retail giants

NSW Farmers is calling for an ACCC inquiry into the supermarket retail sector as fair prices for consumers and farmers remain nowhere in sight.

“With grocery costs surging, consumers and their families are struggling to put food on the table – yet farmers are still receiving the same dysfunctional prices for their produce as they did when input costs were far lower,” NSW Farmers President Xavier Martin said.

“It has become increasingly clear that margins are not being passed through the supply chain in a fair and equitable manner, and it is farmers and families who are footing the bill.”

Mr Martin said farmers were bearing the brunt of the anti-competitive behavior by supply chain middlemen, with many NSW Farmers members reporting significant abuses of power by the major chains.

“Farmers are being offered increasingly lower prices that often don’t cover their cost of production, with little justification and a ‘take it or leave it’ attitude from supermarkets,” Mr Martin said.

“Many farmers have also faced the challenge of being locked into the one buyer due to their unique specifications and requirements, and some have even reported their produce has been rejected when a buyer has discovered they are also supplying other businesses.”

According to Mr Martin, consumers were also suffering under the current system, which had seen the average weekly cost of groceries skyrocket.

“Consumer research shows that the average weekly cost of groceries increased by $37 between February 2022 and February 2023,” Mr Martin said.

“Not only are these price increases astonishing, but they are also increasingly unrealistic for consumers and their families in the current economic environment.”

However, a review of the food and grocery code of conduct by former competition minister Craig Emerson would likely do little to address the pressures farmers and families face as a result of supermarket power abuses, Mr Martin said.

“As the Food and Grocery Code only covers a small fragment of the supply chain, it will not delve into the core issues that need to be addressed, such as price transparency and the excessive profits gained through price gouging,” Mr Martin said.

“The Emerson review of the code will also rely solely on verbal testimony from stakeholders, rather than a rigorous ACCC analysis of the prices being charged to consumers, the prices being paid to suppliers and the costs supermarkets incur – which is what we desperately need.

“Failure to properly review these issues via the ACCC will likely force more farmers to exit the industry and lead to a reduction in food and fibre supply, further magnifying the rising food costs we are seeing today.”

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