Coles responds to urgent requests for pay increase as production costs blow out for famers

| 23.06,22. 12:06 AM |

Coles responds to urgent requests for pay increase as production costs blow out for farmers

Increases in shipping and logistics have added to the rising price of groceries.(ABC News: Michael Barnett)

Suppliers' costs went up during the If you are finding it tough paying high prices for fresh food right now, spare a thought for the farmers supplying it.

pandemic and energy, labour, shipping and logistics have ballooned again this year due to the war in Ukraine, but suppliers need to negotiate with supermarkets before the price they receive for their products can change.

Supermarket giant Coles said it had received five times the usual number of pricing increase appeals from suppliers compared to the same time last year.

The company has forecast an "unprecedented round of pricing increase appeals over the next 12 months from the nation's food and grocery manufacturers" and said it would review the way it dealt with those requests.

In a statement, Coles said, "A major focus of the review is how suppliers will prove to Coles the size and scope of their own cost increases."

Coles supporting flooded farmers

The recent floods have had a dramatic effect on the supply of fresh food and farmers are reeling financially from the wet and cold conditions.

In a statement Coles said it had been helping those farmers by increasing the amount it paid for produce.

"There has been a sharp decline in the amount of fresh produce available, with payments for some of the harder-hit categories of fresh produce up by tens of millions."

One Lismore grower who has supplied vegetables to Coles for more than 35 years was badly hit by the flood.

Coles said it issued this supplier with a three-year supply agreement "to demonstrate our confidence in the business and support it through this extremely challenging period".

Price freezes

Jan Harwood from Margaret River Free Range Eggs is one of those struggling with rising production costs.

"Our packaging has gone up 30 per cent in 12 months, [while] the hatchery has just put up their prices by 20 per cent and that's really going to hurt us," she said.

Ms Harwood said egg prices in the United States went up 50 per cent last year and she thinks Australia should follow suit.

She was also worried about the impact of supermarket chain Woolworths' "price freeze" campaign on suppliers.

Eggs, oats and dairy products are all on the list of more than 200 home-brand goods that have had their prices "frozen".

"They're already walking a very thin line in terms of profits."

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