Close eye needed on ‘bumper crop’ fruit and veg price war

31/01/12

Shadow Small Business, Competition Policy and Consumer Affairs Minister Bruce Billson has welcomed the short-term benefits of fruit and veg price cuts but has called on the competition regulator to keep a close eye on supermarket behaviour when supply conditions return to normal.

Mr Billson said while consumers should be happy with heavy discounting he said the use of a bumper season should not be used to set a depressed benchmark price as it would risk damaging growers, supply chains and consumer interests in the longer term.

“The great growing conditions Coles has pointed to as the reason why discounting is possible should see fruit and vegetable savings available for consumers regardless of whether they shop at a big supermarket or the local green grocer if healthy competition exists,” Mr Billson said.

“If only Coles and their customers have access to the benefits of a bumper season, then other factors must be at play that risk undermining long term producer and consumer interests.

“Its great consumers are able to access discounted fruit and veg at a time of bumper supplies but the Coalition is concerned about the longer term effects unsustainable discounting could have on the economy.

“I understand consumers want to see discounts every time they push their trolley down the isle but we have to be responsible economic managers and look at the economy as a whole.

“The Gillard Government has fallen asleep at the wheel in managing competition and the economy. Since the flop that was Grocery Watch we haven’t seen anything from the Government to manage this area of the economy.”

Mr Billson said it was important to take a longer term look at what sustained discounting could have on the market place to make sure consumers, supermarkets, small businesses and farmers are all given a fair go.

“In a properly functioning competitive market consumers should be able to see savings on fresh produce at all retail outlets, big and small,” Mr Billson said.

“The Coalition will be carefully examining whether the discounted attributed to bumper crops are available across the market or whether other factors are at play.

Mr Billson said the Coalition’s 2010 election commitment to a root and branch review of competition framework recognises the changing market conditions and new challenges to supermarkets, producers, small businesses and consumers.