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AU: Online fruit and veg retailers forced to compete as Amazon's arrival approaches

While the arrival of United States online shopping giant Amazon in Australia is sending a chill down the spines of Australian retailers, the fresh produce trade is viewing the platform as an opportunity.

Operations at Amazon's first Australian distribution centre, in Melbourne's eastern suburbs are ramping up, with a sign at the Dandenong warehouse declaring it is "day one" for its new staff.

At a recent international gathering of wholesale market operators hosted in Melbourne, the potential disruption the arrival of Amazon could have on the trade was a major topic of discussion.

"There's no doubt it's in the forefront of people's minds," Melbourne Market Authority chairman Peter Tuohey told the ABC.

"The online market is certainly growing, and Amazon will capture a lot of that market."
In the US, Amazon's recent acquisition of supermarket chain Whole Foods marked a major push into the grocery space, but its fresh produce business AmazonFresh has achieved mixed results in Europe.

The day it took ownership of the chain, prices on staples such as avocados and bananas were slashed by as much as 43 per cent, according to financial news service Bloomberg.

"I suspect there's an argument that says if you get the logistics right in Australia then you can probably do it anywhere," University of Melbourne business professor Colin McLeod said.

For more than half a century Tony Faranda and his family have been farming in a bountiful food bowl that is being gobbled up by development.

According to data from Roy Morgan Research, despite the availability of online grocery shopping, Australian shoppers have been reluctant to use the service.

Easy access to physical stores and the similarity of pricing in-store and online means that despite a stated intention to use online shopping for fresh produce, few were buying online.

But the AmazonFresh model is built on heavy discounting, which could be the inducement Australian shoppers need, and Mr Tuohey said the wholesale markets could be part of the equation.

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