News

Reforms needed to fix supermarket supply

Guest Author, 14/01/2022

NSW Farmers President James Jackson says the Federal Government urgently needs to address supply chain failings in the fresh food sector.

Many Australians were concerned to see images of fresh food departments stripped of produce, which was an “entirely avoidable” situation according to Mr Jackson.

“Food scarcity is not actually a problem in Australia, but the pictures you see on the nightly news would have you believe there’s not a single cucumber or head of lettuce left,” Mr Jackson said.

“We have been warning government and the big retailers of the problems in their supply chain, and here we are: empty shelves at supermarkets while greengrocers and markets are fully stocked.

“The savvy shoppers know where to get their food, but the government needs to make sure everyone is doing the right thing when it comes to food security.”

Australia has the most concentrated supermarket sector in the world, with a 70 per cent market share for the largest two chains, and 90 per cent market share in the hands of just four supermarkets. However, COVID has brought these enormous supply chains to their knees in recent weeks, and Mr Jackson said it was an entirely avoidable situation.

“A year ago the ACCC’s Perishable Goods Inquiry warned that ‘in most perishable agricultural goods markets, there are many farmers, but few processors or wholesalers, and even fewer major retailers’ – what we are seeing now is a direct result of this market imbalance,” Mr Jackson said.

“The fact that online grocery orders from major retailers are now being delivered by independent taxi drivers reinforces the resilience of smaller agile businesses to deliver when big and monopolised systems are on their knees.

“Aussie families deserve better than a supermarket system that fails to adapt to change in this way, and it is the government’s responsibility to put in place the safeguards to make sure it doesn’t happen again.”

Source: NSW Farmers

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Comments

  1. Simon Jones, 16/01/2022

    Realistically only a portion can be blamed on the government. All the supermarket chains rely largely on some form of centralized processing and distribution, I am guessing these are already running at 100% capacity before the panic buying onslaughts, they need to run at 100% otherwise they don’t make money. To turn around and suddenly produce 200% of normal production is a mathematical impossibility especially in these times when there are 5-10% vacancy & absenteeism rates before covid problems exacerbate the issue. Centralized processing & distribution are great for efficiencies and keeping costs down but they just cant react quick enough in these times.

  2. J Andreatta, 15/01/2022

    Government intervention will never happen. No politician on either side of the ledger has the guts to stick their neck out when it comes to supermarket power. Only the Australian public can fix this.

    So many issues of fair practice – not just COVID supply issues – could be overcome if people were willing to shop at their local fruit shop. I’m a medium-sized veggie farmer – not a shoppie. All I can say is that without the fruit shops still in business, my business would cease to exist. Thank you shoppies – and those who shop there, especially.

  3. Peter Dunn, 14/01/2022

    Well, nothing much has changed since last year. The Federal Government is to blame for all the problems. The rate of spread of Covid, the vaccine rollout rate, the hospital congestion, ambulance ramping and waiting queues for tests are all entirely the fault of the Federal Government. The state governments which are responsible for the operation of the health system are blameless.
    Now it is the supply chain, and in this instance it is the major supermarkets, the transport industry and the producer lobby groups which want the Federal Government to provide a solution at little or no cost to them. It is true that the Federal Government has a significant responsibility in this regard. but once the Covid labour shortages in production, warehousing and transport have eased, will we hear the producer lobby groups calling for a mandatory reduction in the market share of the major supermarkets, for greater use of mandatory codes of practice. and for the removal of supply chain threats brought about by potential foreign influence? I hope so.

    • J Andreatta, 16/01/2022

      Nothing much has changed since last year, Peter? Nothing much has changed in the past three decades – except for the increased concentration of market power in the form of the duopoly.

      Both sides of politics are to blame, just as we the consumers are. By buying from butchers, green grocers and specialty suppliers in our own communities we can dilute powers of supermarkets. It would seem the Australian public has prioritised price and convenience over small business in recent decades.

      As the old adage goes, one ought to be the change one wants to see in the world. I feel that much of the Australian public does not prioritise his/her small business community- else why would Australia have the duopoly it does?

      This is not a question of partisan politics. It is a reflection of Australian culture.

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