The NFF Horticulture Council has today written an open letter to Australia's major supermarket chains urging them to respond promptly and constructively to price increase requests from fresh produce suppliers, as fuel and freight costs continue to escalate.
Fuel prices, fuel levies and transport surcharges are rising rapidly and, in some cases, changing daily. For a sector that relies heavily on refrigerated, long‑distance freight, these increases are placing immediate pressure on growers and suppliers across Australia.
The Council said timely acceptance of cost‑reflective price adjustments was essential not only to maintain current supply, but to send the confidence signals required for growers to continue investing in future production.
"Supermarkets are critical partners in the fresh produce supply chain. How they respond to these cost pressures now will directly influence whether growers have the confidence to keep planting, investing and producing for the future," said Chair of the Council, Mr Jolyon Burnett.
Queensland Fruit & Vegetable Growers CEO Scott Kompo-Harms said fuel surcharges applied by freight companies had risen rapidly, with those further away from capital city markets most heavily impacted.
"We're hearing fuel surcharges of up to 65 percent of the value of the consignment being applied on top existing freight costs for growers in Far North Queensland. This increase blows out of the water the already thin margins for fresh produce growers," Mr Kompo-Harms said.
The Council noted that ongoing uncertainty around cost recovery is already influencing decision‑making at farm level, with some growers delaying or scaling back production in response to rising input costs and weak price signals.
Peter Spackman, CEO of vegetablesWA, said confidence in not just the fuel price, but the ability in the regions to source enough fuel to sustain elementary production practices had already led to the abandonment of future plantings.
"We are aware growers, with no prospect of being supplied by their regular distributor, are currently running into the outskirts of Perth on a daily basis looking for diesel to run pumps and irrigation among other things. It's no way to run a business and makes it easy to understand why growers are reconsidering plans for putting more seedlings in the ground," Mr Spackman said.
Mr Burnett said these pressures come at a time when supermarkets have an important role in helping stabilise the supply chain and preventing future shortages and food price spikes by supporting continued domestic production.
Mr Burnett also highlighted the importance of supermarkets conducting all trading practices, including negotiations over new grocery supply agreements, in good faith. This includes recent concerns raised publicly and through government processes regarding supplier pressure, pricing references below the cost of supply, and the reliability and transparency of volume forecasts provided to growers.
"Good faith dealing means accurate forecasts, fair negotiations and recognising the real costs being borne by suppliers," Mr Burnett said.
"Where growers have invested on the basis of supermarket forecasts, those volumes should be honoured before alternative sourcing is pursued."
The Council emphasised the very same fuel challenges were being experienced in the nursery industry and the same request applied to Bunnings and their handling of price increase requests.
Greenlife Industry Australia CEO Sean Cole said growers of ornamental plants were also experiencing rapidly escalating costs of production and transport that were cutting into their own thin margins.
"Greenlife growers of any scale need to deal with Bunnings as the dominant retailer of its products to the public. The extent to which Bunnings supports its suppliers through the current crisis will for many growers determine whether they're still in business once fuel prices and supply normalise," Mr Cole said.
The Council emphasised that supermarkets and big box retailers play an indispensable role in Australia's fresh produce and nursery industries and that strong, transparent supplier relationships are fundamental to ensuring affordable, reliable access to fresh food and plants for Australian consumers.
"We all share an interest in a resilient horticulture sector," Mr Burnett said.
"Supporting growers through periods of acute cost pressure is not only fair, but also essential to safeguarding the nation's food security."
The open letter is available here.
