By Growcom Interim CEO Pat Hannan
The Australian Government has just announced they’ve asked the Australian Competition and Consumer Commission (ACCC) to investigate the bargaining power in supply chains for perishable agricultural products in Australia, including fresh fruits, vegetables and nuts.
In making the announcement Federal Agriculture Minister David Littleproud said the inquiry was in response to long held concerns about existing bargaining imbalances and the misuse of power by some sections of the fresh food supply chain.
We need to be aware that an increase in bargaining power enjoyed at one end of the supply chain doesn’t come without costs, and instead comes with risks in terms of our social and economic recovery from COVID-19.
The supply chains upon which consumers rely are relatively long, and are more susceptible to disruption. This is especially the case here in Queensland where fresh produce grown in North Queensland is trucked in bulk to Brisbane before being redistributed back north again.
Greater market share for supermarkets reduces the bargaining power all the way down the supply chain and particularly for growers at the end of the chain.
This loss of bargaining power translates to even narrower margins for growers, less capacity to innovate and take on risk including new job creating business opportunities, and a reduced capacity to respond to future disruptions and natural disasters.
Unfortunately, in some cases, ever narrowing margins also translate to attempts at externalising costs onto the environment, and a higher likelihood of worker exploitation.
This ACCC inquiry is another important opportunity to have a conversation about what sort of markets we want to serve our interests, as an industry, but more importantly as a society.
The ACCC has acknowledged that it can be difficult for growers to submit evidence detailing poor treatment from supply chain partners, and so has committed to keeping all submissions confidential.
Growcom encourages all its members with issues to raise to make a submission. We will be making a submission ourselves on behalf of industry and would value any evidence or examples growers would be happy to anonymously share. To do so, please be in touch through the Growcom office.