Green giants are gobbling up the little growers
Sydney Morning Herald
July 8 2002

The supermarket supremos Woolworths and Coles are exerting enormous influence even beyond the farm gate, Consumer Writer Matt Wade reports.

Australians' love affair with Coles and Woolworths has helped drive thousands of fruit and vegetable sellers to the wall and is forcing many farmers to get bigger or get out.

Amid continuing allegations that the two supermarket superpowers are squeezing both smaller rivals and producers on the price of fruit and vegetables, there is growing concern about the power they have over the cultivation, distribution and sale of food.

"The two big retailers are exerting incredible influence down the food supply chain," said a Sydney University economic geographer, Dr Bill Pritchard. The buying power of this mighty duo means that they influence the size of farms, which crops are planted, how they are grown, how they are transported and what price they fetch.

A report for the Productivity Commission by the consultants Retailworks said Coles and Woolworths control 65 to 70 percent of the take-home fresh food market. "Australia has the most concentrated take-home food market in the world," said the managing director of Retailworks, Martin Kneebone. "No-one else in the world would have two players with even a 25 percent share - we are very distorted in that respect."

At the other end of the food supply chain, farmers are angry about the creeping influence Coles and Woolworths have on them.  Woolworths buys 25 percent of all the fruit and vegetables grown in Australia and about 15 percent of the meat for its 680 supermarkets.

Adjunct Professor Barry McGlasson, a University of Western Sydney food specialist and Woolworths consultant, said the trend for farmers to increase size and production was being accelerated by the supermarket majors.
" We are seeing the growth of larger private growers and corporate growers," he said. The number of fruit and vegetable farms turning over more than $200, 000 a year is rising, says the Bureau of Statistics, while the number of smaller growers is declining.

As well, say growers, Woolies and Coles only buy produce from growers accredited with the companies' quality control systems, which regulate everything from fertilisers and chemicals to the size and appearance of produce and how it is transported.