KEY POINTS:
Struggling fruit growers are lashing out at "greedy" supermarkets for keeping consumers in the dark over huge mark-ups on fruit and vegetables.
Peaches, apples, nectarines and other fruits can sell for up to $6 a kg in supermarkets - a mark-up of more than 100 per cent in
some cases - with little extra return to the growers.
Apple grower and Hawke's Bay Fruitgrowers Association president Leon Stallard said he sold apples to suppliers for about 40c a kg, only to find them on supermarket shelves months later for $2.99 a kg.
New Zealand has only two supermarket chains Progressive Enterprises and Foodstuffs and Stallard said their buying power is "massive".
"People think when the prices go up that we're the ones making money out of it, but we don't see any of it."
Growers say supermarkets use their huge market shares to push down growers' margins which causes food prices to rise as more suppliers struggle through.
Stallard said because New Zealand has no pricing watchdog, there is little transparency over supermarket pricing for consumers and growers alike.
The process of getting apples from the orchard to the supermarket is complex and consumers are often unaware of the costs involved.
Statistics New Zealand figures reveal fruit and vegetable prices rose an average 8.7 per cent in the year to December 31, with apples 38 per cent more expensive. Growers' costs had gone up 10 to 15 per cent.
One summerfruit grower, who did not want to be named, said growers were being squeezed by increases in production costs, including fertilisers, picking, freight and fuel.
He said it may be necessary for supermarkets to increase further fruit prices to ensure growers' survival.
"We have been losing money for many years and we have become accustomed to increasing our debt," he said.
"Supermarkets must become more efficient and less greedy with their level of mark-up. Producing summerfruit in New Zealand is not profitable."
Richard Hodgkinson, a fruit supplier to supermarkets across the North Island, said a 100 per cent mark-up was not outrageous because supermarkets dealt with perishable goods.
His costs include fuel, packers' wages and charges to store fruit in a coolstore for months on end, with annual power costs between $8000 and $10,000.
Foodstuffs (New World, Pak'nSave) and Progressive Enterprises (Countdown, Foodtown and Woolworths) refused requests for interviews.
Instead, they provided statements which said the retail price of fruit was relative to the cost of the product.
"This can vary depending on a number of criteria including quality of product available, transportation costs and other overheads," said the Progressive statement. "We do not run warehouses which hold stock over - what comes in goes out overnight."
Foodstuffs' general manager of retail sales and performance, Murray Jordan, said the company has long-term partnerships with growers. "Despite price increases, margins have not increased and produce is competing with a large range of other retailers serving customers."
Hodgkinson said if growers were not making a return they may need to re-evaluate their overheads.
But growers say they are operating on tight budgets and, when the price of fruit is below production costs, they often receive nothing. They are at the bottom of the supply chain after middlemen responsible for transport, handling, wholesale and distribution.
