How low can they go?
With this week's media around Coles (once again) requesting that suppliers look at reducing their own costs so they can make more money for their shareholders and look good in the eyes of the consumer, rather than looking inward at their own practices and profitability, growers around the state are collectively rolling their eyes.
We heard growers in the Lockyer, Granite Belt, South East Queensland, and Bundaberg over recent weeks speak about their lived experiences when negotiating with retailers. What was interesting to learn was that all growers who had attempted to use their cost of production as a firm boundary to achieve a satisfactory price negotiation (that is, to just stay in business), were told that they had to gain efficiencies and cost savings rather than look for increases. Variations of, ‘You need to be more efficient and sharpen the pencil’ were commonplace throughout negotiations.
If you think you're experiencing DeJa’Vu, you’re right. Unfortunately, we’ve been here before with a letter from a major retailer going out to suppliers back in 2022 asking growers at the height of the COVID inflationary period to turn their minds to cutting costs instead of relying on a price rise.
A simple math equation should be all that's required to end this nonsense. When costs have been proven to have escalated 30-65% since 2020 and prices received have remained stagnant at best for over a decade, how do retailers think this is going to go?
How low and for how long can growers accept below their cost of production limit before they go broke and walk away? When is enough, enough? What happens to food security then?
This media spin is just another example of how retailers are taking advantage of their market power. The sheer audacity of asking growers to drop prices instead of looking inward, although predictable, is rude.
The last word this week goes to my late grandmother who would say to remember in occasions such as this, “Every time you point a finger - there are three pointing back at you.”
