'Massive' mark-ups crippling growers - Kedgley

"Massive" supermarket mark-ups on fruit and vegetables are crippling growers and putting their industry at risk, says Green Party food spokeswoman Sue Kedgley.

She has called for pricing practices to be investigated and a supermarket code of conduct to be drawn up in light of a survey by her party of 75 growers which revealed that supermarkets put up to 500% on to the cost of fresh fruit and vegetables, while growers were often forced to sell their produce for less than it cost to produce.

The survey found that only 15% of growers reported that their business ran at a profit, 87% were forced at times to sell produce at less than cost, and 75% thought supermarket mark-ups on fresh produce were far too high.

"Our survey suggests that unfair pricing practices on the part of some supermarkets are decimating many fruit and vegetable growers and putting their industry at risk," Ms Kedgley said.

"It is simply unsustainable for growers to sell produce on a routine basis for less than the cost of production."

She said the "massive" mark-ups by New Zealand supermarkets hit both consumers and producers, as the low prices growers were getting for their produce was not being passed onto consumers.

"Serious questions need to be asked about why supermarkets put exorbitant mark-ups on fresh produce, while mark-ups on processed foods are normally around 23%."

Ms Kedgley said it appeared that the two main supermarket chains, Foodstuffs and Progressive Enterprises, used their duopoly position to play growers off against each other and drive prices down to unsustainable levels.

"The government must address the huge power imbalance between two giant supermarket chains and the small-to-medium size growers that are the backbone of our horticulture industry."

Ms Kedgley said the UK had a supermarket code of conduct and ombudsman to ensure growers and consumers were treated fairly and it was clear New Zealand urgently needed one.

Tony Carter, managing director of Foodstuffs (which owns Four Square, New World and Pak N Save) said  it was "simply incorrect" to say mark-ups were 100-500 % but would not say what they were because it was "commercially sensitive."

Peter Smith, managing director of Progressive Enterprises (Foodtown, Woolworths, and Countdown), said pricing information was "market-sensitive and varies on a daily basis."

Commerce Minister Simon Power said he would look at the issue and would not rule out introducing a code of conduct for supermarkets.

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The greens have yet again shown their lack of knowledge of basic economic principles and business 101. The price of apples has hardly changed in the last 10 years, and the vairable component is teh min wage which thegreens insist is too low. On occassion we have brougt fruit & vege from the farm gate out of Auckland only to find the supermarket is actually cheaper.....

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The 500% markup figure is a gross exaggeration to the point of being a lie.

Countdown/Foodtown do seem to charge a significantly more than the other crowd.

Fruitworld should be giving the supermarkets more competition, but their prices are on a par with Pak n Save. This all says that price gouging to the extent claimed by Kedgely is incorrect, but that people need to shop around to encourage the supermarkets to sharpen their prices.

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