The big supermarket chains are feeling the heat, and tonight there are reports Coles is pushing suppliers to drop their costs by up to 14 per cent. Farmers are worried that they’ll be next according to Queensland Fruit and Growers association CEO Rachel Chambers.
Farmers Express Concern Over Coles’ Call for Price Cuts
There’s a growing concern among farming communities as Australia’s supermarket giant, Coles, calls on suppliers to reduce their prices. This move is aimed at creating customer savings but has raised alarm among farmers who are already grappling with industry challenges.
Coles’ request for price reductions comes as the big supermarket chains are feeling the economic heat. The company argues that lower fuel and freight costs provide some room for factories to roll back price hikes. However, this move has sparked worries among farmers, who are concerned about the potential impact on their livelihoods.
The call for lower prices from Coles is part of a broader strategy to increase competitiveness and attract more customers through lower shelf prices. This comes despite warnings from food and grocery suppliers about the potential dangers of such price cuts.
In response to these developments, supermarkets have been put on notice to pass on savings when meat and food prices drop. When wholesale prices go down, the cost of items at the checkout should reflect this change.
Despite the call for price reductions, Woolworths, in its submission, stated that increases to grocery costs were driven by “cost increases from our supplier partners, and cyclical impacts”. This highlights the complex interplay between supermarkets, suppliers, and market forces that determine the prices consumers pay.
As the federal government announces a review of the grocery code, it assures that it will use all options available to ensure supermarkets are pricing goods fairly. This development adds another layer to the unfolding dynamics between supermarkets, suppliers, and the government.
The coming weeks will reveal how these tensions play out and what impact they will have on suppliers, competitors, and ultimately, consumers. For now, farmers and suppliers are watching closely, hoping for a resolution that doesn’t compromise their interests.
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