Why produce at Coles, Woolworths, Aldi and IGA could jump in price again

The cost of a grocery shop may rise even further following pay changes on farms across the country that could potentially flow down to consumers.

Under the new Horticulture Award, which came into effect on April 28, farmworkers who were paid 'per piece' will now have a minimum wage.

It's the first time workers on Australian farms will be guaranteed a minimum wage. Previously, pickers were paid per piece picked or packed.

Workers will now earn at least $25.41 an hour.

'Nail in the coffin' for some farms

Chief executive of Fruit Growers Tasmania, Peter Cornish acknowledged a minimum pay guarantee was needed, but said it was "likely" to increase supermarket produce prices.

"Whether that transfers into [sale] prices or not is another matter, but there will be a pressure on that for sure," he told the ABC.

"If they have to top up people that are below the minimum, that means higher costs and it may well transfer into higher fruit prices as well."

Nicole Giblett from Newton Orchards in Manjimup, Western Australia, told Yahoo News Australia ditching piece rates could be "another nail in the coffin" for some farms.

"It’s our experience that trying to harvest, thin or prune fruit using locals or backpackers being paid per hour simply does not work," she said.

"For example, [during 2021's] harvest we had to pay wages as people refused to work for piece rate, and our labour picking costs skyrocketed.

"Most apple growers currently operating at or below cost of production for at least a proportion of their crop if not most of it," she continued, adding she's worried about food security in Australia.

Will it increase the price of produce?

It's unknown how the change will affect supermarkets, with Woolworths and Aldi telling Yahoo News they try to keep a balance between affordable prices for customers and suppliers.

"We pay the market price for fresh fruit and vegetables," a Woolworths spokesperson told Yahoo News.

"We’ll continue to engage closely with our supply partners as the changes are implemented.

"We set clear expectations for our suppliers to uphold the rights of workers through our Responsible Sourcing Policy and conduct regular due diligence."

Aldi said they work "collaboratively" with business partners on "long standing agreements" to keep prices as low as possible, but said there are a number of factors that contribute to the price of fresh produce such as weather, seasonality and the cost of labour and crop maintenance.

"We are seeing a number of inflationary pressures and increased costs in our supply chain but our commitment is to keep prices as low as possible for customers while maintaining fair agreements with our supplier partners," a spokesperson said.

Yahoo News Australia reached out to Coles and IGA for comment.

'Unfair to allow fruit pickers to be underpaid': Australian Workers' Union

Despite concerns the new rules will filter down to the consumer level adding to the already increasing price of fruit and vegetables, the Australian Workers' Union isn't worried that will happen.

"Of course we’re going to see more scaremongering about consumers prices, despite the fact fruit prices have actually been relatively stable over the past two years when Covid put unprecedented pressure on the labour force," AWU National Secretary Daniel Walton in a statement.

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“But even if we accept the dubious point that prices will go up slightly on average, what’s the argument? That we should encourage an underclass of workers in Australia on third world wages so our supermarket berries cost one per cent less?

"For too long the farmers' lobby has seen fruit pickers as somehow beneath the usual standards offered to Australian workers. But the hard work of pickers deserves the same minimum wage dignity afforded to everyone else.

"Now at the end of each day every picker should be assured that their work netted at least $25.41 an hour. If not, their employer is stealing from them and breaking the law."

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