AU: Price wars blamed as another tomato company bust
Basacar Produce was a large supplier of cherry tomatoes to Coles, but went into administration last week, with debts of over $3.5 million.
Until going bust the company sold 4500 trays to Coles every day from four farms. It is the third major tomato operation to collapse recently, after massive tomato grower SP Exports went bust in February owing $31m and Barbera Produce failed in September.
CEO of AUSVEG, Richard Mulcahy, has written to the Joe Ludwig, the Agriculture Minister to vice his concern.
He wants the government to look into the cause of so many, previously successful, companies going bust.
Personally he feels that the supermarket discount wars are to blame.
"It is extremely concerning that operators are being forced out of the industry due to increasing costs of production and the slim margins these growers are being forced to accept as a result of supermarket pricing tactics," he said.
Increasing labour costs are also a problem. Mr Mulcahy said in New Zealand vegetable growers paid employees $13 an hour, compared with Australian worker rates of $26 an hour.
Peter Hockings, head of the Bundaberg Fruit and Vegetable Growers Association, described the mood in his region as grim following the Basacar collapse.
He said that while growers were reluctant to blame Coles and Woolworths for fear of offending them, grower returns had not increased over the past three years while input costs for labour, power and chemicals had soared.
Source: www.theaustralian.com.au
