Senate Inquiry reveals unconscionable treatment of growers

by | May 31, 2024

The NFF Horticulture Council recently welcomed a report by the Senate Select Committee on Supermarket Prices, which reveals the true cost of supermarket power and exploitative behaviour being borne by both Australian households and the national horticulture industry. 

While the evidence of price gouging at the checkout was no surprise, there was shock at the evidence of widespread appalling treatment of fresh produce suppliers, Council Chair Jolyon Burnett said

“What started as an important investigation into supermarket pricing practices on struggling households has also provided widespread examples and growing appreciation of the impacts of supermarket profiteering on the sustainability of Australian fresh produce and nursery businesses and supply chains,” Mr Burnett said. 

“The Select Committee has reported on troubling testimony from growers of predatory pricing practices that exploit the perishable nature of fresh produce, the imposition on growers of costs and risks outside their control, and of an almost universal fear of commercial retribution should any objections be raised. 

“Not only are growers getting a raw deal with every trade they are also left with little profit to reinvest in the productivity of their businesses. Our partners, including transport operators, are also getting squeezed leaving our food supply chain weak and susceptible to disruption.  But this report is just part of a growing base of evidence that is painting supermarkets and Bunnings in the same light as the big four banks following the Royal Commission into that industry,” he said.

Still unfolding is the Review of the Food and Grocery Code of Conduct led by Dr Craig Emerson, due to be reported by June 30, and the ACCC Supermarkets Inquiry 2024-25, expected to table an interim report no later than August 31. A final report is due next February. 

“We expect the ACCC reporting to paint a far more vivid picture of unscrupulous supermarket practices given the addition powers of the ACCC to compel evidence and testimony,” he said.

The Council welcomed recommendations by the Select Committee to dramatically tighten provisions within the Food and Grocery Code and attach significant penalties for any breaches.

“These recommendations accord with those already being flagged by Dr Emerson and will work to start levelling the playing field for growers,” said Mr Burnett. 

But it will all be for nothing if the ACCC is not appropriately empowered and resourced to act as a tough cop on the beat, Mr Burnett pointed out.

“The incentives and drive every day within supermarkets and Bunnings to deliver ever greater profits to shareholders at the expense of consumers and growers has to be met, not just by big penalties for breaching the Food and Grocery Code and other Competition Law, but by the very real prospect of getting caught.”

The Council has called on the Federal Government to provide a substantial, ongoing investment in the ACCC to deliver on its new monitoring and compliance expectations.