Court action mounted this week against four of the country’s largest vegetable suppliers for alleged price-fixing blows a hole in the established science that supermarkets have been driving up prices for vegetables sitting on their shelves.
The competition watchdog has flipped the script, claiming that a coterie of suppliers – the so-called cauliflower cartel or the celery swindlers – could be responsible for some of the price pain on the produce aisles.
The price-fixed vegies in the spotlight include zucchini, broccoli and cauliflower.Credit: Edwina Pickles
The Australian Competition and Consumer Commission (ACCC) is alleging these big suppliers colluded to fix the price or supply terms in dealing with Aldi, which could have led to higher shelf prices.
The price-fixed vegies in the spotlight include broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts or zucchini over a six-year period to 2024. If the ACCC’s legal action is successful, it will be an inconvenient truth for the swath of politicians who had pushed the pre-election message that greedy, price-gouging supermarkets had to be stopped.
The ACCC’s final report from its own inquiry, released in March, found no evidence that Australian supermarkets were price gouging. But it did point out that the Australian market was highly concentrated (no surprise there) and more importantly, many suppliers were concerned they were being exploited by the supermarket giants.
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To be sure, the thousands of small farmers that supply fruit and vegetables to the retail market are doing so legally, and are in an asymmetric negotiating position with the large supermarkets. But it has been a convenient narrative to place the blame for the cost of food and groceries exclusively in the laps of the supermarkets, without bothering with the nuances of other issues in the supply chain.
Perfection Fresh Australia, the nation’s second-largest fresh vegetable supplier; Hydro Produce Australia, a fresh-produce wholesaler and grower based in NSW; Victoria-based wholesaler Veli Velisha Fresh Produce and Velisha National Farms; and Victoria-based M. Fragapane & Sons, which trades under the name Fragapane Farms, were those named in the ACCC’s court action.
Between them, these suppliers operate in most Australian states and potentially face millions of dollars in fines if the ACCC’s allegations hold up in the Federal Court.
