Posts Tagged ‘Supermarkets’
On the next episode, screening 17 July at 7 p.m. on TV ONE:
When supermarket price-setting was threatening the livelihood of Northland growers, they fought back by cutting out the middle man and selling their produce direct to consumers.
Today the Whangarei Growers Market is a thriving venture providing a living for around 30 local producers. Many more seasonal suppliers jostle for space throughout the year.
The market was started 12 years ago by Robert Bradley and Murray Burns in what has been likened to a David and Goliath struggle.
Robert Bradley says the supermarket chains were using their buying power to dictate prices, with low returns driving small to medium sized growers out of business.
Tomato grower and market co-founder Murray Burns was one of those whose margins were being whittled away.
“The only way to deal with that was to get much bigger or close down – and we wanted to do neither,” says Murray.
The pair were inspired by the concept of village markets in Europe and the United Kingdom, and a resurgence of farmers’ markets in the United States.
They found other growers who shared their predicament and a group of 12 held the first market in a car-park in Whangarei in 1998.
It now takes place every Saturday morning and, when Country Calendar visited, everything from fruit, vegetables, meat, eggs, milk and cheese to macadamia nuts and olive oil was on sale. The market has a rule that all produce must originate in Northland.
The local-only principle has kept struggling growers afloat and encouraged new businesses that may not otherwise have been viable. Asparagus, for example, is now grown in Northland for the first time in many years.
The market is also a venue for growers and consumers to meet face-to-face – there is a requirement that growers are also the stallholders.
At the peak of the growing season, the market attracts up to 6000 shoppers over the four hours it is open. Around 50 pallets, or 2000 cases, of produce is sold each Saturday.
Robert Bradley says the key to success has been offering significant qualities of high quality local produce at moderate prices.
Many similar markets have sprung up around the country in the last decade but the Whangarei enterprise deliberately distances itself from the popular farmers’ market movement.
Robert believes some of the newer markets have got sidetracked into “food fashion”.
“For us it is a matter of ‘keep it simple stupid’ – and it has really worked.”
Editorial: Supermarket conduct code makes sense
3:59 AM Tuesday Jul 6, 2010
Photo / Sarah Ivey
In theory, the power that this country’s two major supermarket chains wield over their suppliers should benefit shoppers. The low prices they pay for produce should be reflected at the check-out counter.
But, according to a Green Party survey of fruit and vegetable growers, that is not happening. The survey found supermarkets applied mark-ups of up to 500 per cent on fresh produce.
To compound matters, growers were often forced to sell the produce for less than it cost them to grow it. That has implications for the quality and range of produce on supermarket shelves.
It needs to be said that the Greens’ survey was of just 75 growers. That is hardly comprehensive. But its conclusions bear a close relation to the situation in Britain, which has bedevilled that country’s competition watchdogs for the past decade.
There, a code of practice for supermarkets was introduced as far back as 2002 in an effort to ensure a fairer deal for growers. It proved ineffectual, and, as claims of bully-boy tactics by the biggest supermarkets escalated, a new and stricter code was introduced in February this year. This required, among other things, standard terms and conditions.
The code is aimed at the power imbalance between the supermarket chains and smaller growers, which in Britain prompted the likes of retrospective adjustment, whereby suppliers would receive a lesser price if their produce failed to sell. It was not aimed at supermarket mark-ups.
Nor need it be. Where competition thrives, addressing that lies in the hands of consumers. Most people can easily go to another retailer if they feel prices are excessive.
Perhaps that was what Consumer Affairs Minister Heather Roy had in mind when she said, “the Government isn’t about to start dictating to retailers what their profit margins should be”. But if she was referring to supermarkets’ dealings with suppliers, she was being overly simplistic. Even Britain’s Conservative Party went into this year’s general election pledging to introduce an ombudsman, who would name, shame and fine supermarkets guilty of unfair dealings with suppliers.
That provides evidence enough of the size of the problem in Britain. It may not be as substantial in this country, but the Greens’ survey suggests it exists. Only 15 per cent of the growers said their business ran at a profit, and 87 per cent said they were forced at times to sell their produce at less than it cost to produce. In some instances, say the Greens, suppliers are played off against each other.
All this is far from academic to the consumer. A 2008 report by Britain’s Competition Commission found that supermarkets’ transfer of excessive risk and unexpected costs to their suppliers was likely to lessen the latter’s ability, and incentive, to invest in new capacity, products and processes.
In some cases, growers would not survive. If unchecked, this process would lead to supermarkets having lower-quality fruit and vegetables and less product choice. Conversely, if there were more small suppliers in a market, prices should go down.
The Green Party wants this country to follow Britain and adopt a supermarket code of conduct. The Food and Grocery Council says the concept should be investigated but only if the British code succeeds in improving retailer-supplier relationships.
That seems overly cautious. Current market conditions are not optimum for fair and free competition. Suppliers would benefit from having their dealings with supermarkets placed on a more equitable footing. So would consumers. And if the situation is nowhere as bad as in Britain, the supermarkets have nothing to lose.
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