Growers and big retailers at odds over supply chain

REGIONAL food producers and growers’ markets believe the deregulation of trading hours will severely impact on their businesses.

Much of the concern centres on the potential loss of customers for smaller, independent operators, and the consequences of market domination.

WA Fruit Growers Association president Steve Dilley said WA’s fresh food producers would be big losers if changes were made to retail trading hours.

“It [the deregulation of trading hours] will create a huge bargaining imbalance between producers and retailers. The larger chains will inevitably become more dominant and then can basically dictate price,” he said

“It is not just the WA fruit industry that stands to lose from the deregulation of trading hours; the likes of beef and sheep will also be affected.”

But Chamber of Fruit and Vegetable Industries in Western Australia president Grant Etherington said the chamber had not made a decision to support deregulation or not.

“There is such a variety of opinion within the chamber,” he said.

One senior management official at a growers’ market said while the supermarkets were significant customers, he was worried about the impact of smaller suppliers and a growing tendency for the supermarkets to go directly to the grower.

“One of the chains is our biggest customer. There is a trend towards going direct but they come to us to top-up supplies or when we can give a better price,” the official said.

Fresh Choice buying services manager Kris Skilton said deregulation would force out small business operators and would have a direct impact on markets such as Fresh Choice.

“They [the big chains] are going direct to buyers now, but the proportion in the long term will double if they have more market share,” she said.

Ms Skilton said unemployment would be a direct effect of deregulating WA’s shopping hours.

WA Independent Grocers Association president John Cummings said that, unlike the big supermarket chains, independent supermarkets supported local growers.

“If deregulation occurs the large chains will increase their market share. This means smaller chains, which traditionally are big supporters of local regional growers, will effectively buy less,” Mr Cummings told WA Business News.

However, Coles and Woolworths said they sourced nearly 100 per cent of their fresh produce from WA.

A Coles spokesman said more than 80 per cent of fruit and veg was WA sourced.

“All of our top 10 fruit and veg suppliers are WA growers. We spend well over $100 million a year on fruit and vegetables in WA – that puts us as one of the major buyers in the local market,” he said.

“We buy pre-packed Carnarvon bananas through our banana supplier and these are clearly labelled as Carnarvon bananas.”

The spokesman said that Coles also offered national opportunities for local producers.

“We also buy large amounts of meat, fish, deli, bakery and dairy products from WA suppliers. Considerable amounts of this go into the national chain. That is, we offer local suppliers opportunities to market nationally,” he said.

According Woolworths corporate communications manager Ian Brown, Woolworths has maintained its local buying office in WA and the majority of fresh produce is bought from local growers.

“Potatoes are 100 per cent sourced in WA, tomatoes are upwards of 85 per cent, grapes 100 per cent, stone fruit 100 per cent, leaf vegetables 99 per cent,” Mr Brown said.

“Our buying policy is a local one with the view for potential intra-State export.”