4.4.13 Low Prices Hurting Table Grape Industry

4.4.13 Low Prices Hurting Table Grape Industry

Sunraysia’s table grape growers are hurting, and unlike previous seasons, it’s not because of drought or rain.

Australian Table Grape Association (ATGA) Chief Executive Jeff Scott said growers in the region were producing high quality, sweet table grapes, but unfortunately, the returns to growers were unsustainable.

“Growers are being offered between $11 and $13 for a 10 kilogram carton of Menindee Seedless or Thompson Seedless, but it costs them $14 to $18 a carton to grow,” Mr Scott said.

Small numbers are securing reasonable prices through the central market system, but these low volumes are unsustainable also.

“Nobody can sustain losses like these and it is effectively destroying the industry.”

Mr Scott said that the major cause of the low return to growers was inadvertently due to supermarkets only purchasing from a few main suppliers. The majority of these suppliers have their own table grape farms.

When they cannot maintain supply to the supermarkets, they then purchase from numerous family owned farmers but offer prices that are unstainable in the short-term and will force the growers out of business and loss of livelihood in the very near future.

“This season saw a huge increase in yield from the early supply regions, exacerbating the problem by extending the early season into the main growing season of Sunraysia,” Mr Scott said.

A group of family owned growers attended a meeting with a senior supermarket produce buyer last week. The supermarket produce buyer advised the growers of forming a grower alliance to provide an alternative supply, but did not guarantee any sustainable purchase price

“Whilst the co-op idea is reasonable, many grower co-ops have started and failed for many and varied reasons,” Mr Scott said.

“The main issue is that prices being paid to growers are far too low, and the policy of supermarkets is to encourage and nurture a small supply base that can provide large volumes and this exacerbates the problem.”

Mr Scott Miroverve said the small group of growers who supply either or both of the chains are increasing their plantings to maintain or grow their market share.

“We assume these select suppliers submit a price for the upcoming week, with the buyers accepting the lowest offer, thereby setting an unrealistically low price based on the purchase of supplier market share, not the value of the product,” Mr Scott said.

These major suppliers are all receiving the same price per kilo for their offer. With limited cool room capacity, the smaller family-based business are forced to sell their fruit soon after picking, whereas some of the larger growers with bigger cool rooms and export market options can ride out price fluctuations.

Mr Scott also said that there doesn’t appear to be reward for quality. The supermarkets set a minimum specification which they can alter. In an extended supply base, new supplier growers would still not be rewarded for the extra costs to provide a better product. The customers of these major retailers do not see the quality of produce available from Australian growers. The growers have no alternative but to export this premium product to Asia, where growers are currently receiving fair returns.

“A take home message for all consumers is that the quality of the products you have been seeing on the shelf are in direct proportion to the input costs expended by the grower, knowing he has to minimise his costs to stay viable. Therefore, as Asian consumers are willing to pay for quality, they are receiving the premium food being grown in Australia at this time,” Mr Scott said.

ATGA Chairman Mr Lomman said, “The ATGA is committed to continued dialogue with Coles and Woolworths, and will continue to support this outlet for our fruit. We will be hoping for some substantial policy changes prior to next season’s harvest. We do not want to see the loss of livelihoods of our growers.”