Fruit and vege markups call for supermarket conduct code

A new survey has found that seventy-eight percent of growers are being forced to sell their produce at less than cost. Photo / Supplied

Supermarkets are regularly marking up fruit and vegetables between 100 and 300 per cent, according to a Green Party survey, but the figures are being rubbished by the big two supermarket chains.

The survey, released today, of 121 fruit and vegetable growers has found that despite high retail prices for fruit and vegetables, growers as well as consumers are struggling.

It showed that supermarket pricing practices need to be investigated and a supermarket code of conduct and ombudsman established, Green Party food spokeswoman Sue Kedgley said.

"Seventy-eight per cent of growers in our survey are being forced to sell their produce, at times, for less than it costs them to produce it."

Ms Kedgley said that of the growers that were being forced to sell their produce below cost, more than a third had to so on a frequent basis.

"Supermarkets are still routinely putting substantial mark-ups of 100-300 per cent on fresh fruit and vegetables.

"This suggests that supermarket mark-ups remain a key factor in the high price consumers are paying for fresh local produce, and that the low prices many growers are getting for produce are not being passed onto consumers."

Ms Kedgley said many growers detailed the returns they got for produce, and the amount their produce retailed for. Some growers reported margins of up to 800 per cent on their produce, while most suggested supermarket margins were around 100-200 per cent.

One grower said they received less than $2 for a tray of 20 avocados - which cost $8 to produce - which the supermarket then sold for $19.80, a margin of 880 per cent.

One apple grower said he was getting the same price of 50 cents a kilogram as they did in 1998.

Many reported seeing their produce marked up between 100 and 300 per cent in the supermarkets.

The survey found 87 per cent of growers supported a supermarket code of conduct, while 83 per cent believed a voluntary code would not be effective.

Ms Kedgley said serious questions needed to be asked about why supermarkets put such high mark-ups on fresh produce, while they put virtually no mark-ups on alcohol, and the mark-ups on processed foods are normally around 23 per cent.

But Foodstuffs managing director Steve Anderson told the Sunday Star-Times the survey contained "blatant and deliberate misinformation".

"Consumers are not being overcharged in our stores and accusations that supermarkets make mark-ups of the nature claimed in this survey are outrageous, and insult the intelligence of all shoppers."

Foodstuffs had almost completed its own supplier relationship guidelines and it opposed a mandatory code because it would add costs for consumers, he said.

A Progressive spokesman told the paper the figures provided by growers were "grossly inaccurate".

Responding to the call for a code of conduct, he said the company had very good relationships with produce suppliers.

"We pay them a fair price and we have regular reviews. We are interested in supporting growers because without them, we wouldn't be able to put quality kiwi produce on our shelves."

Horticulture NZ said a code could benefit growers and consumers as it was aware of frustration over the issue of mark-ups.

"We would definitely be interested in having a look at it because Australia and the UK have progressed it," a spokeswoman said.

"There is a concern that there isn't enough transparency. Who knows what goes on?"

- NZPA