Testimony provided today by Coles senior executives, at hearings as part of the ACCC Supermarket Inquiry, have revealed how hollow supermarket commitments on price and volume are for fresh produce suppliers.
It was revealed that purchase orders, issued after a weekly negotiation process, were also subject to further negotiation at the behest of the supermarket and not always to the advantage of suppliers.
Coles executives appeared to defend this practice by suggesting any change in price or volume on the purchase order would need to be mutually agreed.
This followed an awkward and prolonged exchange where executives refused to admit whether the longer-term volume forecasts provided to suppliers were legally binding.
NFF Horticulture Council Executive Officer Richard Shannon said the way supermarkets play with suppliers, over whom they have a huge amount of power and leverage, was unconscionable.
“You’d have thought supermarkets, making billion-dollar profits, could wear small shifts in the market through a week and not reopen negotiations after a purchase order have been issued, and in some instances, where the product is already on a truck,” Mr Shannon said.
“Taking so many bites of the cherry is greedy and frankly distasteful. Supermarkets are growing fat on the hard work of Australian farmers.
“And so, we need to ask the question: How much more do we need to hear about supermarket trading tactics with fresh produce before the Federal Government steps in with meaningful guardrails to protect vulnerable suppliers?
“The Council has already confirmed it cannot support the updated Food and Grocery Code of Conduct that the Treasury put out for consultation, in part because of how weak the requirements are around price and volume negotiations.
“The public too is demanding not just fair prices at the checkout but also a fair deal for farmers. We again call on the Federal Government to take stronger action.”
About the Horticulture Council
The Council is the recognised peak body for forming policy and advocating on behalf of the national horticulture industry. Established in 2017, it now comprises 21 national commodity and state-based horticulture bodies.
It is a member of the National Farmers’ Federation, free to establish and advance its own policy positions and responses issues impacting the horticulture industry.
For more information about the Council click here.
Stacey Davidson