Farming advocates say growers are too afraid to speak out against supermarket dominance over unfair pricing

Farmers say they are too scared to speak out over unfair pricing of their fresh produce due to fear of being shunned by dominant supermarket chains.

John Lowe from NSW Farmers told a senate inquiry into supermarket prices on Tuesday that small food producers were “seriously intimidated” by the companies’ sheer market power.

“We’ve got an issue where … if you send lambs to the abattoir and they are downgraded, there isn’t a clear grading scale as to what is bad and what is acceptable – and it can be a significant discount,” Mr Lowe said.

“It’s so easy to go on the ‘I don’t want to buy from you’ list because you’re trouble – and that can happen to any producer, and all of a sudden you can’t get a contract.

“It’s very insidious. It can be very subtle but the result is that you get taught fairly strongly and others see what has happened to you.”

The 12-month Greens-led inquiry is holding its second hearing at Orange in NSW Central West on Tuesday.

It is interrogating the price-setting and market power of Australia’s two major supermarket chains, amid concerns they have profiteered from high inflation and rising living costs.

Nearly 90 per cent of food and beverage manufacturing businesses operating in Australia are either non-employing or small, according to the latest ABS data.

Kathy Rankin, head of policy and advocacy at NSW Farmers, said most small growers were too scared to speak out against companies behaviour because did not have the legal or financial resources to launch a winnable dispute.

She said the mandatory grocery code needed to be strengthened to make sure any complaints process was independent and put the costs back onto the supermarkets if they were found to be acting unfairly.

“If you’re a small grower trying to grow produce you don’t have solicitors at hand or people waiting to deal with those issues – yet they’ve (chains) have got all of those people there ready to handle it,” she told senators.

The average weekly grocery bill increased from $148 in 2022 to $185 per week in February this year, according to a recent Finder survey.

Both Coles and Woolworths, who have combined market control of about 65 per cent of the industry, have denied allegations of price gouging and claim that an uptick in corporate profits have been driven by improved in-store productivity.