Fruit growers engage former supermarket buyers to learn “art of negotiation”

In a bold tactic to ward off pressure to lower their prices, fruit and vegetable growers are seeking out former supermarket buyers to learn their tricks.

Desperate fruit and vegetable growers are engaging experts, including former supermarket buyers, to learn the art of negotiation as they tackle the retailers’ push for low prices.

Peak industry body Apple and Pear Australia Limited is offering growers subsidised courses teaching negotiation tactics, in an effort to proactively manage the major retailers’ expected transition from an inflationary to a deflationary phase amid pressure from consumers and the federal government.

In an industry newsletter, APAL warned growers that Coles and Woolworths’ public relations teams had flagged intentions to drop prices over the next 24 months.

Growers were told to brace for the launch of cost recovery programs, such as Coles’ Supplier Partnership Program that provides a template for buyers to talk to suppliers about prices.

“While this might be good news for consumers, it isn’t for growers,” the APAL newsletter said.

To combat this, former supermarket buyers from consultancy group NextGen – including a former senior category manager with Coles – have been engaged to teach growers how to successfully negotiate with buying teams.

Australia’s monthly inflation rate reached a record 4 per cent in May from a year earlier, the Australian Bureau of Statistics said, and food prices were up 9.3 per cent – but fresh food is an outlier, and is in deflation.

“Fresh produce deflation was driven by fruit, particularly apples and avocados, while deflation in meat was driven by red meat, particularly lamb,” Coles’ April update said.

APAL’s head of government relations and advocacy Jeremy Griffith said growers have been pushing for a fair price from supermarkets for more than a decade.

“Growers haven’t received price increases for 15 years. Coles and Woolworths have specialised buying teams and a playbook … These teams are trained, highly skilled negotiators … We as an industry took the view that (to match) that level of sophistication, we need to at least understand what was going on,” he said.

Mr Griffith has spent considerable time understanding the retailers’ buying approach, what prices were being paid and how they were set.

Rather than a formal contract between growers and retailers, almost every grower has a weekly check-in with buying teams who inform them of the going price for their product, which they’re given 24 hours to accept or decline.

“It’s a perishable product, they worry about being seen as a difficult supplier, so they usually accept the price,” Mr Griffith said.

Coles chief executive Leah Weckert appears before the Senate Select Committee on Supermarket Prices at Parliament House in Canberra. Picture: NCA NewsWir /Martin Ollman

A Coles spokeswoman denied the existence of an in-house negotiating handbook, but said external providers conduct external training and they provide resources.

“All our team members regularly undergo training to better equip them to manage posotive long-term relationships with our suppliers,” she said.

Peak vegetable grower body AUSVEG is also offering specialised training for farmers to negotiate more strategically with the supermarkets, while the Queensland government is funding “negotiating masterclasses” for fruit and vegetable growers.

The retailers are under immense pressure to reduce their prices following a Greens-led Senate inquiry into prices and an Australian Competition and Consumer Commission inquiry – yet to hand down its final report – into their pricing practices.

At the same time, the federal Treasury engaged former Labor minister and economist Craig Emerson to review the Grocery Code of Conduct.