Peak industry grower bodies are citing caution this week as Woolworths announces it will begin a year-long trial of price fixing in their vegetable and fruit lines.
Horticulture organisation Growcom said it would adopt a ‘wait and see’ attitude to the supermarket’s decision to implement static prices for five staple items consumed by Australians.
Chief Executive Officer Alex Livingstone said that while Woolworths’ fixed pricing scheme might represent greater security for consumers it may be bought at less security for growers overall.
“The scheme could be good for those growers who have a guarantee of consistent pricing for 12 months for large volumes of produce,” said Livingstone.
“However, those growers who supply their produce to Woolworths through a third party may find the cost pressures required to offer consumers guaranteed fixed prices are being passed on to them.”
The national peak industry body for Australia’s 9000 vegetable and potato growers, AUSVEG, was more cautious about the possible impact upon farmers.
“What Woolworths has implemented is an artificial market mechanism…it causes AUSVEG some concern,” said AUSVEG Public Affairs Manager William Churchill.
“While this system could be good for growers supplying for Woolworths when prices are competitive, we’re yet to see the details on what happens when competing retailers drop the price of their products below what Woolworths is charging,” said Churchill.
Woolworths announced this week that it would fix the prices of five items in their national chain to give consumers “consistent value”.
The prices range from $1.88 per kilo to $4.98 per kilo for truss tomatoes, brown onions, Golden Delight brushed potatoes and apples (Granny Smith in WA and Red Delicious elsewhere), as well as $1.45 for a bag of prepack carrots.