The Australian fresh produce industry is assessing strategies to lessen the market power held by the country's two largest supermarket chains, Coles and Woolworths. The discussion follows the Australian Competition and Consumer Commission (ACCC) inquiry into supermarkets, which concluded earlier this year and outlined growing concerns for growers and suppliers.
The inquiry found that Coles and Woolworths are among the most profitable supermarket groups globally. It reported that both companies' margins have continued to rise, that they exercise monopsony power by setting prices for growers, and that the long-term sustainability of Australia's fresh produce sector may be at risk if market dynamics remain unchanged.
The report detailed several practices supermarkets use to influence farmgate prices. These include reliance on weak regulation, control of market data, creation of negotiation environments that favour buyers, and concentration on perishable product categories with limited export alternatives.
While the government is considering regulatory reforms to address supermarket dominance, industry leaders are also outlining measures that growers and suppliers can take to limit exposure to market pressures.
Maintaining public scrutiny
Industry representatives note that public attention has become one of the few effective checks on supermarket conduct. Once considered among Australia's most trusted brands, Coles and Woolworths have faced increased criticism following recent media investigations. The resulting reputational pressure has encouraged regulatory action, which sector groups believe should be sustained to maintain momentum for reform.
Improving data access
Supermarkets have built systems around detailed sales and inventory data, allowing them to track national supply and demand in real time. By contrast, growers often operate with limited data. To address this imbalance, the apple sector has introduced the National Orchard Census to improve forecasting and provide insight into consumer trends. Broader industry participation in such data initiatives is viewed as essential for future bargaining strength.
Enhancing negotiation capability
Supermarket buyers receive extensive training in negotiation and behavioural techniques, while growers often lack equivalent preparation. New regulations under the mandatory Food and Grocery Code have improved the legal framework for supplier negotiations, but industry leaders emphasize that understanding these rights and applying them collectively is key to achieving fairer outcomes.
Expanding export opportunities
Export diversification remains limited for some commodities. For example, apple exports account for only about 1% of total production. Increasing this share to 4% could offer growers an alternative outlet to domestic retail chains. Opportunities in markets such as China and Canada are under consideration, though they require investment and coordination across the sector.
The ACCC inquiry and ongoing discussions within the horticultural sector reflect growing concern about long-term competitiveness and sustainability in Australia's fresh produce supply chain.
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