By Greg Thomson, Community Newspaper Group editor-in chief
AUSTRALIANS farmers will be the poor suckers who ultimately suffer as the nation’s two biggest supermarket chains slug it out over who can offer the cheapest, freshest produce.
Coles has attempted to steal a march on arch-rival Woolworths by offering discounts of as much as 50 per cent on selected fruit and vegetable lines.
The company claims the move is a win/win for customers and producers, with the supermarket giant able to move an over-supply of particular fruit and vegetable lines following good growing conditions.
Farmer groups, however, fear the discounting can only lead to lower farm gate prices, adding more pressure on producers and inevitably driving some out of business.
While consumers will no doubt welcome any reduction in the price of consumer goods, we are a savvy lot and some worry about the plight of primary producers and the need to encourage a healthy agriculture sector.
When Coles and Woolworths aggressively dropped the price of their home-brand fresh milk, many customers opted to stay with the well-known brands, such is their loyalty and their commitment to quality.
The same can be seen in the battle between cage egg producers and barn-laid or free-range egg farmers – consumers will happily pay for quality, and for fresh, ethical food supplies.
In discounting fruit and vegetables, Coles and Woolworths will need to be careful that the marketing exercise not turn into a public relations disaster where farmers are squeezed off the land by ever-reducing margins.
Australians want cheaper fresh produce, but they also want a healthy Australian farm sector that continues to produce export-quality food.
Without good returns, Aussie farms will continue to be sold off, often to overseas countries looking to safeguard their own long-term food supply chain.