Australian farmers slam Coles and Woolworths for profiting from inflation amid cost of living crisis
Australian farmers have reacted furiously to suggestions that major supermarkets are making super profits because they have the power to pass rising costs on to consumers, as experts reveal evidence of pushing prices on essentials.
Major retailers, including supermarket giants Coles and Woolworths, are preparing to announce their profits for fiscal year 2021-22 and market analysts expect them to hit billions of dollars even as the skyrocketing cost of living bites consumers.
Stock market analyst Johannes Faul told the AF that supermarkets’ ability to raise prices as needed meant that profits would at least remain ‘stable’.
New analysis has predicted that consumers will give up luxuries and focus on essentials such as increasing the cost of living, accepting high supermarket prices and allowing major retailers to keep their profits (Paddy’s Market stallholders, who often have lower prices, pictured). than supermarkets)
Australian farmers have reacted furiously to suggestions that rising inflation could boost supermarket profits as they pass rising costs on to shoppers (pictured is NSW farmer Chris Stillard and his son)
Another analyst, Craig Stafford, said supermarkets are “in good shape” as inflation leads to higher prices for consumers.
The earnings forecasts come as an independent financial sector analyst told the Daily Mail Australia there appears to be ‘evidence of price inflation’ in supermarkets and called on the ACCC to investigate.
Guy Gaeta, an Orange cherry grower, told the Daily Mail Australia that the idea of supermarkets getting richer amid high inflation, while forcing families and fighters to austere, “really irritates me.”
“You can’t use inflation as a reason to make money, it’s shocking. They’re ruthless,’ he said.
Mr Stillard claimed inflation is the perfect excuse to get supermarkets ‘off the hook’
Guy Gaeta, a cherry grower from Orange, told the Daily Mail Australia that the idea that supermarkets can ‘get richer’ from high inflation, while forcing families and fighters to austere, ‘fouls me’.
‘Of course everyone pays more for extra costs, such as fuel. But if you say, “Well, we’ve got seven percent inflation, so we’re just going to raise prices by 10 percent,” that’s just price inflation, isn’t it?
“It’s easy money for them, they should want to buy more Ferraris – it’s just a rip off.
‘I don’t think it’s fair that you make profit from people because of inflation. I thought nobody makes money from inflation?’
Martin North, a financial industry analyst at Digital Finance Analytics, said consumer surveys from his company show that supermarket prices have increased by “20 percent or more, well above CPI” in some cases.
Farmer Chris Stillard complained there is no mechanism in Australia to prosecute price gouging (Picture: Mr Stillard with his family)
Supermarkets’ price hikes are too high and don’t match the additional input costs they’re paying due to inflation, critics say
He claimed that the price increase at the checkout was greater than the increase in ‘input costs’ paid by supermarkets.
“If you look closely, it’s clear to me that these companies are taking the opportunity to boost their profits and secure their profits to shareholders by adding more than the (increase in) input costs to their prices. In other words, companies can raise prices to protect margins at the expense of consumers.’
Mr North claimed that there was price inflation in ‘the supermarket sector, the oil industry and the gas industry’.
“There seems to be evidence of price inflation at a time when consumers cannot afford more than they should be paying,” he said.
A confrontational chart illustrates the alarming rise in the cost of basic groceries, with vegetables, cereals and other household items topping the list of sharp price increases
Martin North of Digital Finance Analytics claimed forecasts of exuberant supermarket profits pointed to a broader ‘business ethics’ problem
Another New South Wales farmer, Chris Stillard, who grows persimmons near the Victorian border, said supermarkets’ confidence in future profits didn’t surprise him.
“I’m not an economist, I’m a farmer, but maybe that’s what you get if you have two supermarkets that control 70 percent of the market,” he said.
“If there is a perfect excuse, such as inflation, supermarkets deter it.”
Mr. Stillard claimed that consistent price increases across all product lines should never occur. He said that when product lines are oversupplied — like apples, because China no longer imports them — prices should drop to reflect that.
“Australia has no laws to prosecute price gouging. It’s blue murder,’ he said.
He said that consumers should not ‘just’ buy high prices: ‘Go and have a look around.’
Last month, Daily Mail Australia proved that the cost of shopping at a supermarket giant was dramatically more expensive in at least one day than at a fruit and vegetable market.
Farmer Guy Gaeta has proposed a boycott of major supermarkets because he says they rob consumers and farmers (From left in photo Guy Gaeta with wife Simonetta and son Michael)
Across Australia, the cost of meat and seafood increased by 6.3 percent in the past year
Daily Mail spent a week buying fruits, vegetables and eggs from Woolworths and Paddy’s Market in western Sydney – with an identical shopping list and weight – and the supermarket giant was almost twice as expensive.
Coles told Daily Mail Australia: ‘At Coles, our main focus is on keeping family store costs low and delivering great value to our customers. Since January, we have reduced prices on more than 1,000 items in our range of more than 20,000 products.”
The $49.75 price difference represented a 45 percent saving on the Woolworths catch, with the grower’s market being cheaper on all but one of the 19 lines purchased.
Woolworths said: “Managing inflationary pressures across the industry will remain the focus for us as we work hard to provide high value customers in partnership with our suppliers through programs such as Price Dropped for Winter and Price Freeze, as well as the thousands weekly specials.’
The price of vegetables, fruit, cereals, meat, bread, eggs, oils, butter and margarines have all risen sharply in the past year, according to the Australian Bureau of Statistics (ABS).
Last week, the ABS released its quarterly figures of the Consumer Price Index (CPI) – the main measure of inflation – with an increase of 6.1 percent over the past year.
The biggest jump in grocery shopping was the cost of vegetables, up 7.3 percent over the past year, mainly due to ongoing flooding in southeastern Queensland and New South Wales.
Coles told Daily Mail Australia that prices are driven by ‘supply and demand’ and that ‘our team is working hard to bring prices down’
Woolworths said it is ‘always working to strike the right balance so that suppliers get a fair market price and our customers’