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Aldi price cutting kills Tony Galati's banana dreams in Western Australia

Tony Galati’s had a vision of giving Western Australia a self-sufficient, $50 million a year banana industry, but after aggressive price cuts by Aldi he has closed up shop.

Mr Galati, who owns the Spudshed chain of supermarkets, accused the retail giant of taking a loss on some fruit and vegetables to attract customers to their broader range of home-brand products.

He claimed Aldi regularly sold bananas for $1.70 a kilo, and as low as 99¢ a kilo, even though it cost at least $2 a kilo to produce. Mr Galati said Aldi’s avocados, which often sold for $1 each, were also well below the cost of production and claimed Coles and Woolworths were forced to match the prices to compete for customers.

Mr Galati called on the Australian Competition and Consumer Commission to monitor Aldi’s specials, claiming they were deceptive because stocks typically ran out in the morning or early afternoon.

Aldi recently unveiled a $1 billion makeover for its 270 Australian stores, which includes putting fruit and vegetables at store fronts.

An Aldi Australia spokeswoman said prices were low because of its streamlined operations, which included not running loyalty programs or expensive displays.

She said Aldi did not support the introduction of pricing levels that were unsustainable in the long term and which may put pressure on the supply chain. “Our suppliers enjoy growth and success as we continue to expand,” she said.

Publication date: 4/20/2017


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