Coles supermarkets announcement today that prices on some vegetable produce lines would be discounted by up to 50 per cent has been labelled „concerning? by vegetable industry body, AUSVEG.
While some vegetable growers stand to benefit from the significant discounting by Coles, AUSVEG is asking the question of where these savings are coming from, and what effect this scheme will have on the greater viability of the industry.
AUSVEG is the National Peak Industry Body representing Australia?s 9,000 vegetable and potato growers.
“With this new scheme being implemented not too long after the Woolworths fixed pricing scheme last year, we can see that the supermarket wars have well and truly arrived in the fresh produce industry and this fight will get savage,” said Mr Churchill.
“The drive by the major retailers to capture market share will place an untold amount of pressure on many other growers who aren?t supplying Coles, as competitors try to replicate this kind of offer to their customers,” said Mr Churchill.
“The scheme provides some select growers the opportunity to sell higher volumes of produce at a discount and still maintain a successful business – but not all growers are in a position to supply the enormous volumes required to make a profit from these discounted sales,” said Mr Churchill.
“The adverse impacts of this kind of campaign will become evident in time particularly for growers who are committed to supplying Woolworths, independent retailers or wholesale markets as customers shift to Coles stores. Ultimately, growers who don?t supply Coles will be left in limbo,” said Mr Churchill.
“There are severe risks to producers, their businesses and their families all around the country from moves like this and it forecasts a disturbing price war where growers will be unable to sustain these sorts of discounts, running themselves out of business,” said Mr Churchill
“What the industry would like to see is some substantiated evidence that this sort of discounting is not adversely affecting Coles growers and be able to demonstrate the benefits of this risky promotion,” said Mr Churchill.