Toolamba farmer quits growing vegetables over supermarket pricing

But now the Toolamba man is done, and he said his decision to get out of the fruit and vegetable game was a direct result of the discrepancy between what he was paid as a supplier, and what his produce was sold for in supermarkets.

“Labour has gone up, everything has gone up, but we seem to be getting less on our product than we were 20 years ago,” Mr Marsolino said.

Mr Marsolino said he was being paid $1.50 to $2 per kilogram for his zucchinis, while they were retailing in supermarkets for $5.90/kg.

“I wasn’t going back to do that again this year,” he said.

Instead, Mr Marsolino left the industry and switched to growing lucerne for animal feed.

He said he specifically chose his new crop so he would no longer have to deal with supermarkets and what he described as growing discrepancies between farmgate and store prices.

“I’d rather be growing vegetables, I love growing vegetables, I love seeing the product grow,” Mr Marsolino said.

“But I won’t do it under these circumstances.

“There’s no way known I was going to keep doing it and supplying the big chain stores.”

Mr Marsolino said one of the hardest parts of his decision was cutting his workforce from 150 employees to just two.

But he’s not alone in his frustration and inclination to leave the industry.

A vegetable industry sentiment report from peak industry body AUSVEG shows roughly a third of growers are considering leaving the industry in the next 12 months.

“A lack of operating profit, input cost increases, poor retail prices, increased cost of labour, and compliance burden were identified as the top factors informing growers’ decision about whether to leave the industry, in the most recent survey,” the report stated.

“This situation could have been avoided, and failing to reverse it will have serious implications for Australia’s food security.”

The difference in the price paid to suppliers and the price charged to the public by supermarkets was a focus of the Australian Competition and Consumer Commission inquiry into supermarkets, which began last year.

It was also a topic in the independent review that led to upcoming changes to the Food and Grocery Code of Conduct.

The code of conduct, which was previously voluntary, will become mandatory from Tuesday, April 1.

“This will protect suppliers and farmers and improve supermarket conduct with heavy penalties for breaches of the code,” according to the Federal Government.

The government said the new mandatory code would address imbalances in bargaining power between large grocery retailers or wholesalers and suppliers and help protect suppliers from retribution.

Supermarkets, including online grocers, that meet an annual Australian revenue threshold of $5 billion will be subject to the code.

Penalties for the most serious breaches will be either $10 million, three times the value of the benefit gained, or 10 per cent of turnover in the preceding 12 months, whichever is greater.

“The mandatory Food and Grocery Code is part of the government’s broader competition policy agenda to get families and farmers a fair go,” the government said.

But Nationals leader David Littleproud said the upcoming changes had been too slow to come into effect, and didn’t go far enough.

“Labor has been too slow to act, forcing farmers like Ross to leave the industry,” he said.

“Even when Labor’s code comes into effect, the changes will do little to stop price gouging, with inadequate infringement notice penalties of just $198,000, compared with the Coalition’s planned infringement notice penalties of $2 million for supermarkets who do the wrong thing.”

Mr Marsolino also questioned why it had taken the government so long to act, and expressed scepticism that the new mandatory code would result in real changes.

While he is no longer in the fruit and vegetable game, Mr Marsolino said he worried about other farmers who remained in the industry.

Spokespeople for Coles and Woolworths said neither of the supermarket chains had a direct supplier relationship with Mr Marsolino for zucchinis.

Mr Marsolino confirmed that he sold to a wholesaler who then sold his produce on.

The supermarket spokespeople said they would not be involved in what wholesalers paid suppliers.

When asked about the discrepancy in farmgate and retail pricing, a Coles spokesperson said criticism of the difference in pricing failed to consider the broader costs in the entire supply chain.

“It should be noted that the retail price also includes additional costs incurred such as transport and distribution across the country, along with operational costs like energy, insurance, labour and leasing,” the spokesperson said.

“We work with all our fresh produce suppliers to set clear agreements on volume ahead of the season and collaborate closely with them to ensure a fair and competitive market price.”

While Coles would not comment directly on what the company paid wholesalers or other suppliers for zucchinis, a spokesperson said the overall profit margin for the company was 2.6 per cent.

Mr Marsolino baled his first crop of lucerne in recent weeks and, while he said he missed growing vegetables, he was comfortable with the choice he made to leave the industry.

He said he wasn’t looking to be greedy with his profits, but he didn’t want to continue to lose money, especially when large companies were making so much.