Earlier this week Rod Sims, chairman of the Australian Competition and Consumer Commission, offered protection to whistleblower farmers and grocery supplies if they spoke to the ACCC about long-alleged price gouging by Australia’s supermarket duopoly.
“Some of the behaviour that supplier organisations and others have alleged, if true, would amount to unconscionable conduct,” said Sims. “We’ve been urging suppliers to give us some evidence to take things forward [in a prosecution], but we’ve been having trouble getting that. Too many of them are scared. At the moment all we’ve got is third-party hearsay.”
But for West Australian vegetable grower Greg Norton, who sells his vegetables to a wholesaler that supplies Coles and Woolworths, it’s not fear keeping farmers from talking. “It’s not the fact that we’re frightened. It’s that the ACCC isn’t powerful,” said Norton.
Lynne Strong, sustainability and marketing manager at NSW’s Clover Hill Dairies, agreed: “The ACCC is a toothless tiger.”
Clover Hill Dairies won the 2010 National Landcare Woolworths award for Primary Producer of the Year. It supplies its milk to Lion and Parmalat, which then sells the milk as supermarket label product in Coles and Woolies respectively. Clover Hill’s product ends up in the $1 a litre Coles v Woolworths milk wars.
Watching the milk they work hard to produce sell for just $1 a litre is heartbreaking, Strong told Crikey: “It devalues your product. It devalues what you do totally to think that your milk is worth less than water.
“It may be a short-term strategy, they may even believe it themselves in the short term. It’s so simplistic, it has to pass on to farmers, the supply chain cannot continue to absorb it.”
The battle for low prices is just a race to the bottom. “What Coles is doing horrifies me,” said Strong. “When you stand up in the public forum and say ‘I will match price’ then Woolworths becomes Julia Gillard if it doesn’t do it.”
But despite the frustrations, arguing to the ACCC is pointless, says Strong. She fronted last year’s Senate inquiry into milk prices and has put submissions to the ACCC regarding food labelling.
“While they give the impression that they want to help, you’re just chasing your tail, nothing happens. It’s a waste of time,” said Strong. “This is where the government needs to step up to the plate and empower the ACCC to be in the space that they need to be in.”
Norton agrees the result of the Senate inquiry into milk prices — which found consumers were winning from the supermarket price war and that dairy farmers hadn’t been that badly affected — make farmers question why they’d bother.
“This instance [the latest supermarket battle over fruit and vegetable prices] doesn’t seem to be any different from what the dairy industry was,” he said. “So the ACCC findings aren’t going to be any different and no one was really happy with that — producers or the industry.”
Strong also cites the high cost of putting a submission to the ACCC. The first time she submitted a response she hired a private consultant and spent $40,000 of her own money.
“We do not have the skill sets to actually know exactly how to pitch to the ACCC and get results,” she told Crikey.
The ACCC assured Crikey farmers and grocery suppliers do not have to make a formal submission; a simple phone call or email will get the ball rolling for the ACCC to follow up complaints.
But farmers need legislation not inquiries, according to Norton: “To make changes it has to be policy changes at government level, whether that’s setting prices or quota systems.”
For Strong, working collaboratively with customers is the key to successful farming.
“I certainly don’t want to take on the supermarkets, they are a valuable supply chain partner,” she said. “We should be working collaboratively with supermarkets. And that’s what I want to do, I want to go out there and build two-way conversations.”