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Woolworths and Coles have spoken out over allegations that they're jacking up fresh produce prices amid rising costs of living.
The Australian supermarket giants are at the forefront of criticism following statements by NSW Farmers Horticulture Committee Chair Guy Gaeta, who claims that the retailers are to blame for skyrocketing prices of fresh produce.
"It's not against the law, price gouging... but it's [fresh produce] an essential item," Mr Gaeta told Yahoo News Australia. "It's sad. There are families that walk past [the produce aisle] and say, 'I can't afford that'."
Mr Gaeta, a third-generation apple and cherry farmer from Orange, NSW, spoke about how farmers are not receiving any benefit from price hikes of produce sold at the supermarkets.
"If farmers were getting $10 for a lettuce, we'd be driving Ferraris," he said.
Mr Gaeta cited systematic competition failures in Australia, and accused supermarkets like Woolworths and Coles of pushing smaller greengrocers out of business, as well as manipulating farmers to get the lowest possible price for produce while no one does anything about it.
He added that farmers wear the costs of delivering produce to distribution centers.
"They have costs too, but we aren't putting 80 per cent on top of the price we agreed on. We [farmers] are not ripping anybody off."
Woolworths and Coles respond
Both Woolworths and Coles hit back at the allegations, saying they are committed to providing value to customers, especially at a time when household budgets are top of mind.
"It's impossible to escape the cost of living," a Woolworths spokesperson told Yahoo News, citing that jacking up prices, especially by as much as 80 per cent, would be like "shooting yourself in the foot".
The spokesperson added that while profit margins are really tight in the industry, it is still in their interest to make sure the industry thrives.
In a separate statement to Yahoo News, a Woolworths spokesperson also clarified that prices of fruit and vegetables are determined by what they pay farmers.
"We pay farmers the market price for their produce, which can vary throughout the year due to weather, seasonality, supply and demand. Last year, when the market price for fruit and veg was in decline, we passed those savings on to customers in the supermarket," the spokesperson said and added that they are currently paying a lot more to suppliers across the vegetable category.
"The big reason prices are up on some varieties is the reduced supply in the market, following the East Coast floods and ongoing bad weather in key growing regions," the Woolworths spokesperson said. "We operate in a highly competitive market and we're always working to strike the right balance so suppliers receive a fair market price and our customers have access to affordable fresh produce."
Rival Coles also emphasised its focus to keep costs down for families amid inflationary pressures.
"We appreciate that there are a number of factors driving inflation for all retailers, including increases in the cost of raw materials, energy price rises, freight costs, extreme weather events and ongoing Covid impacts," a Coles spokesperson told Yahoo News.
"We are committed to continuing to build strong, multi-generational, collaborative partnerships with Australian farmers and producers, including long-term contracts, which is why so many growers want to work directly with Coles. These partnerships enable us to source directly from suppliers and help us secure fresher produce at great value for our customers."
"The price of produce is a factor of supply and demand; however, our team is working hard to get prices down for our customers as quickly as we can. Our customers can expect to see improved volume of many fresh produce lines in coming weeks thanks to the extraordinary efforts of our growers."
Food and grocery code
Woolworths and Coles are also bound by a Food and Grocery Code regulated by the Australian Competition and Consumer Commission (ACCC).
The code, which is voluntary, was introduced to improve standards of business conduct in the food and grocery sector. Woolworths and Coles were both among the first signatories of the code, along with German retailer Aldi.
In a statement to Yahoo, Australian Retailers Association CEO Paul Zahra chimed in on the issue.
"Retailers are working hard to keep prices affordable for customers in the face of some intense challenges. The supply of certain fruits and vegetables has been impacted by adverse weather conditions, including the recent flooding in Northern NSW and Queensland. This is on top of inflationary impacts, rising energy costs and supply chain constraints that many businesses are continuing to deal with," Mr Zahra explained.
"Businesses do their best to absorb market fluctuations as best they can and are working hard to ensure their stock lines are healthy and that consumer prices remain affordable."
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