Bob Katter and Andrew Gee
Federals MPs Bob KatterĀ and Andrew Gee address media outside an inquiry into supermarket pricing. Image by Stephanie Gardiner/AAP PHOTOS
  • economy, business and finance

Farmers fear for future as supermarkets crunch costs

March 12, 2024

Farmers and producers have warned of a mass exodus from the agriculture industry because of low prices for goods paid for by major supermarkets.

A Senate committee examining supermarket prices has held hearings on Tuesday in Orange in NSW’s central west, with farmers laying bare their struggles in dealing with the duopoly of Coles and Woolworths.

Orchard owner Guy Gaeta, who grows apples and cherries, said major supermarkets had set prices too low for the purchase of produce, leaving an unviable future for growers.

“Every year on the news, Woolies is saying they pay people millions of dollars, but yet they put on us whatever they want,” he told the inquiry

Farmers Ian Pearce, Guy Gaeta and James McClymont
 Farmers Ian Pearce, Guy Gaeta and James McClymont appear at a hearing into supermarket pricing. Image by Stephanie Gardiner/AAP PHOTOS 

“At the rate we’re going … there won’t be any family farms left within five to 10 years, or you’re going to have corporate farms and they’re going to be as good as citizens to the consumer as what they are now, and it is scary.

“If you don’t have family farms, you’re going to lose your food security.”

The Senate inquiry was set up following claims of price gouging by major supermarkets to consumers.

But primary producers have warned the market power of supermarkets have meant they can charge low prices for the purchase of goods.

Fellow orchard farmer Ian Pearce told the committee the prices for goods set by supermarkets had largely stayed unchanged over several years, despite labour costs increasing.

“In 2011, we got $2.37 a kilo and $2.55 a kilo. Last year in September, similar timing, $2.60 and $2.57 a kilo,” he said.

“We’re very dependent with apples on the domestic market … we’re caught in a cost price squeeze.”

Mr Pearce took aim at the market share of Coles and Woolworths, saying there was an imbalance in the industry.

“Even though my wife and I have two sons, who in their early 20s have a passion for agriculture, I really do not see a future for them doing what we currently do,” he said.

“We’re at the point where we’ve got to make some very serious business decisions.”

Earlier, vice-president of NSW Farmers Rebbeca Reardon urged for divestiture powers to be put in place to break up the market share of major supermarkets.

“We require a significant overhaul of our legislative and regulatory reforming competition, including the introduction of divestiture powers to address the high market concentration we’ve got,” she said.

“The concentration is often resulting in growers receiving prices that are below their marginal cost of production, but also being subjected to unfair trade practices and unconscionable conduct.”

Woolworths and Coles
 Woolworths and Coles face claims of price gouging by producers and consumers. Image by Dan Himbrechts, Darren England/AAP PHOTOS 

Outside the hearing, Independent MP Andrew Gee and Queensland MP Bob Katter held a press conference accusing the major parties of inaction on supermarket pricing.

The MPs stood alongside staffers dressed in inflatable pig costumes holding a banner saying: “Stop supermarket hogs and National Party porkies!”

Nationals Senator Ross Cadell watched on, accusing Mr Gee, who sensationally quit the party in late 2022, of being a “stunt man”.

“You did nothing when you were a Nat because all you’re about is the stunts,” Senator Cadell said.

Mr Katter then accused Senator Cadell of playing politics.

The exchange became heated when Mr Katter approached Senator Cadell and told him to stop interrupting.

“Now, shut up,” Mr Katter said, pointing his finger at Senator Cadell.

Mr Gee said the independents on the crossbench and Mr Katter would introduce a bill to cut back the power of the major supermarkets and limit their profits on fruit and vegetables.