AUSTRALIA | The National Farmers’ Federation Horticulture Council has written an open letter to Australia’s 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 have risen rapidly and, in some cases, are changing daily. For a sector that relies heavily on refrigerated, long‑distance freight, these increases have placed 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, 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 of existing freight costs for growers in Far North Queensland. This increase blows out of the water the already thin margins for fresh produce growers,” Kompo-Harms said.
The Council noted that ongoing uncertainty around cost recovery has already influenced decision‑making at the 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 also the region's ability to source enough fuel to sustain basic 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,” he said.
“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.”
Burnett added that these pressures come at a time when supermarkets play an important role in stabilising the supply chain and preventing future shortages and food price spikes by supporting continued domestic production.
He 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. Where growers have invested on the basis of supermarket forecasts, those volumes should be honoured before alternative sourcing is pursued.”
The Council emphasised that the same fuel challenges were being experienced in the nursery industry, and that the same request applied to Bunnings and its handling of price increase requests.
Greenlife Industry Australia CEO Sean Cole said ornamental plant growers were also experiencing rapidly escalating production and transport costs that were cutting into their already 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,” said Cole.
The Council emphasised that supermarkets and big box retailers play an indispensable role in Australia’s fresh produce and nursery industries. 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,” Burnett said.
“Supporting growers through periods of acute cost pressure is not only fair, but also essential to safeguarding the nation’s food security.”
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