Supermarkets have an increasing role in the development of the Australian agricultural sector. An escalation in market share for Coles and Woolworths has created a challenging environment for many Australian farmers and suppliers. It has led to concerns that the current imbalance in market power, favouring the major supermarkets, is detrimental to Australia’s agricultural industry.
The major challenge is to ensure that an appropriate level of protection exists to allow the continued operation of small and medium-sized agribusinesses and retailers, to promote competition in the agricultural sector.
If it is not restrained, this power play may jeopardise the stability of Australia’s food system and also have wider food security implications.
- Australia’s two largest supermarket chains - Coles and Woolworths - dominate the domestic food system.
- Greater diversity is needed in Australia’s food system, to allow equitable co-existence between small and local farming suppliers and retailers, and the supermarket giants.
- An improved balance between ‘buyer power’ and ‘seller power’ must be advocated and closely monitored, to ensure that unfair influence is avoided.
- Government policies must be put in place to protect and provide incentives for local farmers and suppliers within a competitive food system.