When I walk down the supermarket aisle looking for biscuits or a floor cloth or even a litre of milk, there’s a lot of label-reading and head-scratching involved before I take a punt and choose. My choice is sometimes based on price, but not always.
If something is ridiculously cheap, it sets off alarm bells — my moral compass twitches. Something dodgy is going on — someone somewhere is making an unfair buck at the expense of someone else.
Today, the opposite is happening, but I’m still scratching my head.
Things are costly, and someone somewhere is still making an unfair buck.
When farmers are ploughing crops back into the soil because they can’t make a decent living, something is going horribly wrong.
Is it inflation, the post-COVID market, the increasing interest rates, the insatiable demand for Tay Tay tickets, or the war in Ukraine?
Please explain.
If, in the midst of all this, supermarkets can announce a billion-dollar profit — then something at their end is going gloriously right.
It doesn’t take a professor of economics to explain that if you buy zucchinis at $2.40 and then sell them at $7, that’s a nice fat profit. Thanks very much.
Unfortunately, that business plan is unsustainable because you’re making an unfair buck at the expense of your supplier, who will eventually go out of business.
The big two supermarket chains are squirming under accusations of profiteering and cite the reasons mentioned earlier for higher shelf prices.
Some of that may be true, but it still doesn’t explain the difference between what the farmer is offered and what the consumer pays at the checkout. These things don’t add up, and it makes our moral compass twitch.
Where does the difference go? What is it spent on? Moreover — what happened to the $2.7 billion profit that Coles and Woolworths collectively made last year?
The corporates offer generalised answers but no detail.
Perhaps the Australian Competition and Consumer Commission inquiry will wheedle out some detail. But don’t hold your breath. It’s never nailed the corporates down in previous investigations.
The trouble is Australia has just two big supermarket chains. The UK has five, and the US has a lot more.
So, Aussie farmers have to tie their boat to either one of the two big supertankers and take whatever price waves come their way. I know of two growers who say they have been offered one price on Monday and then a lower price on Wednesday because of so-called market fluctuations. If they don’t like it, they’ve got nowhere to go but to set themselves adrift.
Plenty of smaller growers do just that and rely on farmers’ markets for sales. But for big producers, that’s not really an option.
When I was a child in the UK, my mum would trudge up the narrow high street of our little seaside town with her shopping trolley rattling along behind her. She bought fish at the fishmonger’s, bread at the bakery, meat at the butcher’s and fruit and veg at the grocery shop.
Then, in the mid-1970s, a supermarket arrived. She was delighted because it meant just one trip, even if it was at the other end of town.
All the little shops have gone now, and there are two supermarkets in town.
The same thing happened in Australia, but somehow, we allowed just two whales to strangle the little fish and then choke the suppliers.
What can you and I do about this? We can grow our own fresh produce or buy from independent retailers and markets, but that won’t really help the paltry price that farmers receive from the two giants.
We can only hope the ACCC and the voluntary Food and Grocery Code of Conduct grow bigger teeth and get a bigger stick.
Watch this shelf space.
John Lewis is a former journalist at The News
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