Do we need a surcharge to survive?

Christmas eve last year I had a grower call me about a request to supply product during the Christmas period which would have seen them lose a great deal of money as picking, packing, and transporting costs would have all been incurred with public holiday rates. To counteract these losses, the grower requested an increase on buy price, however this was declined, and the grower was told to provide the product as requested and absorb the costs. This is one of many stories we’ve been told where the power dynamic between grower and buyer most definitely sits with the buyer.  

Australians love a good public holiday! For most people the days offer a welcome reprieve from work and an opportunity to have a little getaway while for others whose job doesn’t afford them such conditions, they offer a pay increase for “taking one for the team” so to speak.  

Public holiday surcharges in the food service industry have been around for as long as I can remember and are thus far unregulated as to the amount they can add as a surcharge. The norm has been between 10 and 15%, however it has been reported that this is now creeping up to 20%. As a consumer I have no issue with these increases, as I understand that it costs the owner much more than usual to satisfy my hunger on these government gazetted days.  

Paul Zahra, CEO Australian Retailers commented on the increases saying “…of course, this all comes down to the fact that with public holidays, they need to pay their staff more as part of their award or their contract with the individual staff members. So to try and recover some of their costs, small businesses are actually looking at ways to pass on the cost of living crisis, but small business particularly are going through this cost of doing business.” 

Ahhh the ability to pass on costs – a foreign concept to any grower. In the supply chain the only ability for growers to recoup every and any cost rests in the hands of the buyer and their willingness to pay more. 

In Australia, the Modern Slavery Act requires the Commonwealth Government, large businesses and other organisations with annual revenue of $100 million or more to undertake mandatory reporting of the risks in the supply chain (all of our supermarkets fall into this category). In its broadest definition, the term ‘modern slavery’ refers to any situations of exploitation where a person cannot refuse or leave work because of threats, violence, coercion, abuse of power or deception.  

Abuse of power/misuse of power, in the food supply chain– now there’s an interesting topic of conversation to be had…