‘Dirty tactics, Pushed to brink’: Qld farmers trapped by supermarket giants

Dirty tactics used by Australia’s supermarket giants – including threats and unreasonable rule changes – to punish desperate Queensland farmers have been exposed, leaving cash-strapped growers “too afraid to speak up” and in fear for their futures.

Queensland fruit and vegetable growers say the dirty tactics used by major supermarkets to trap farmers into low prices in order to maximise profits are pushing them to the brink.

The Queensland Fruit and Vegetable Growers association (QFVG) said tactics to punish farmers include purchase ordering being cancelled forcing farmers to dump stock, threats to cease accepting products from a farmer, using an auction system to pit growers against each other and lower prices and imposing unreasonable specifications standards that suddenly deem a grower’s produce worthless or unsaleable.

QFVG chief executive Rachel Chambers said growers were becoming extremely desperate, with a 2023 member survey revealing one third were considering leaving the industry altogether.

QFVG says it has sighted evidence of the tactics used by supermarket giants to squeeze grower margins.

“Evidence that has been collected nationally over the past 12 months from growers reveals the major tactics retailers have been using to squeeze grower margins,” she said.

“Growers have been afraid to speak up about these issues for many years fearing retribution, however now it’s out in the open we can all have a conversation about the practices used by retailers.

“Truth is, our supply chain is in jeopardy.”

A Woolworths spokeswoman said the described practices had “no place in our business”.

Woolworths said the allegations are “serious”. NCA NewsWire / Sarah Marshall

“These allegations are serious and unacceptable, if this is going on in any business it must be stamped out,” she said.

“That can’t be done unless these problems are reported to those who can take action, including the Independent Code Arbiter for each supermarket, who has the power to keep complaints confidential from the retailers.

“There has been no evidence provided to support these allegations and it’s difficult to respond when it’s unclear whether the growers involved actually deal with Woolworths buyers, or whether their experiences relate to other retailers or wholesalers.”

A Coles spokeswoman said the supplier highly values relationships with Australian farmers from around the country.

“Many of our relationships are multi-generational and in some cases extend well over 50 years of supplying Coles,” she said.

“Growers who may have concerns are encouraged to reach out to their Coles team member, or we also have a formal independent complaints handling process which is prescribed by the Food and Grocery Code of Conduct and is available to be accessed by all our farmers and suppliers through the Coles Supplier Portal.”

Owner of the independent Indooroopilly Fruit store and third-generation fruit and vegetable retailer Joseph Guardala said for the big chains, it was quantity over quality.

“It’s a numbers game. Whoever can get them continuity of the product, that’s the contract,” he said.

Coles, alongside Woolworths, dominates the supermarket sector in Australia, leaving growers with little choice. Stock photography, Coles, Alderley

He and hundreds of other smaller retailers flock to the Brisbane Markets in Rocklea every morning to source fresh produce, while larger chains like Woolworths and Coles could snap up mammoth amounts of stock weeks in advance.

Growers who sell in larger quantities are locked into a set price, regardless of the demand of that product a month later when it hits the shelves.

Supermarkets can then decide the selling price pending the availability of an item, ultimately pushing the price of quality products up or down for other retailers.

“(Fruit and vegetable suppliers) will do their absolute best for us because they know that we’re independent but being a wholesaler, they also need to make sure the grower gets paid well,” Mr Guardala said.

Indooroopilly Fruit owner, Joseph Guardala says for the big chains, it’s quantity over quality. Picture: Lyndon Mechielsen/Courier Mail

“We go to those markets every single day to compete, finding the best quality product for the best price.

“It’s disheartening that we have to pay a lot, especially when something is short. It’s also not good when you have to pay top dollar and it’s not very good quality.”

Griffith University consumer spending expert and business analyst Graeme Hughes said they duopolist grocery system was also frustrating customers, who had no choice but to shop the cheaper options during the cost of living crisis.

He said the lack of consumer power impacted a growers ability to sell their products outside of Woolworths and Coles.

“If you’re not selling to one of the big two, you’re effectively not a viable business,” he said.

“They have a huge market share, about 70 per cent, that’s a lot of power.

“Both Coles and Woolworths, they’re obviously looking at data and trends and are able to predict consumer needs and buy based on that which really leaves the producer with nowhere to go.

“And it's very hard to track this (data), so there’s a bit of smoke and mirrors going on and only they (Woolworths and Coles) know.”

While planned talks between Premier Steven Miles and supermarket giant bosses was a step in the right direction, Mr Hughes said a long-term approach was needed by the Federal Government.

“How much regulation do they want to implement into the space and how can they potentially encourage new competition in the space?” he said.

“Market forces would be the greatest thing that could occur and we’ve had a number of internationals look at Australia but they’re still taking a wait-and-see approach because our geographic distance and low population is a business barrier.

“It’s a hard balance to strike, as we do want Coles and Woolworths to be strong and viable businesses, but we don’t want them to be taking more than they should from society.”

The QFVG has launched a national We Give A Fork campaign that encourages growers to share their stories in a bid to find collective solutions that guarantee a fair price for producers.