Green Party survey shows growers face ruin from supermarket duopoly

Supermarket pricing practices need to be investigated and a Supermarket Code of Conduct drawn up, Green Party Food Spokesperson Sue Kedgley said today.

A Green Party survey of 75 New Zealand fruit and vegetable growers found that supermarkets are making huge mark-ups of up to 500% on fresh fruit and vegetables, while growers are being forced to sell their produce for less than it costs to produce.

The Green Party’s survey also found that only 15% of growers report that their business runs at a profit, and 87% of growers are forced at times to sell their produce at less than it costs to produce. 75% of growers thought the supermarket mark-ups on fresh produce were far too high.

“Our survey suggests that unfair pricing practices on the part of some supermarkets are decimating many fruit and vegetable growers and putting their industry at risk,” said Ms Kedgley.

“It is simply unsustainable for growers to sell produce on a routine basis for less than the cost of production.
“New Zealand supermarkets massive mark-ups on fresh local produce is at the expense of both consumers and producers, as the low prices growers were getting for their produce was not being passed onto consumers.

“Serious questions need to be asked about why supermarkets put exorbitant mark-ups on fresh produce, while mark-ups on processed foods are normally around 23%.”

“Is it perhaps to mitigate against the losses supermarkets make from selling alcohol at the lowest possible price?”
Ms Kedgley said it appeared that the two main supermarket chains were using their duopoly position, to play growers off against each other, and drive prices down to unsustainable levels.

“The Government must address the huge power imbalance between 2 giant supermarket chains and the small-to-medium size growers that are the backbone of our horticulture industry.

“There is a Supermarket Code of Conduct and Ombudsman in the United Kingdom, to ensure growers and consumers are treated fairly, and it is clear we urgently need one here.”

Link to the survey:
http://www.greens.org.nz/misc-documents/growers-survey