Are supermarkets overcharging consumers for Australian fresh ginger?
If you buy ginger from a large supermarket, you could be paying four times the price the farmer receives in central markets, and the Australian Ginger Growers Association wants to know why.
- Fresh ginger sells for between $ 39.99 and $ 45 / kg
- Producers say they receive between $ 7 and $ 11 / kg
- Questions arise about the price disparity
Demand for ginger has increased during the height of the pandemic and, combined with a poor growing season, there has been a shortage of fresh ginger around the world in the past 12 months.
In February, fresh ginger was selling for between $ 55 and $ 60 per kilo in most Australian supermarkets, and at least one customer told ABC Rural that she had forked out $ 71.99 / kg in Victoria.
Retail prices had doubled in a year and growers were paid around $ 20 / kg for new season ginger and $ 30 / kg for old season ginger, which spent more time in the soil and was more spicy.
Supply has since increased and Australian Ginger Growers Association chairman Shane Templeton said recent rains had resulted in one of the “best starts” for new ginger crops for “a very long time.”
âTo date, growers are receiving around USD 11 / kg for old season ginger and USD 7 / kg for new season ginger in central markets on the east coast of Australia. “
But a price check of the three major supermarkets showed customers were still charged $ 45 per kilo for all fresh ginger at Woolworths and Coles and $ 39.99 / kg at Aldi.
Mr Templeton said he respected the fact that some producers could potentially be paid more through direct sourcing relationships with supermarkets – and he didn’t know what the supermarket costs were.
But with 80 percent of Australian ginger grown for the fresh market, he feared consumers would be put off by high retail prices.
âThe farmers are the ones who put in all the work, you’re out in the rain, and you pay the wages, you take all the risks and we’re the ones who get the least return,â Templeton said.
Richard Shannon manages policy and advocacy for Growcom, Queensland’s leading horticulture industry group.
“For example, in the last 12 months the farm gate price for tomatoes has been 80 cents / kg, and in some supermarkets it has been $ 8 / kg, which is a tenfold increase, and obviously difficult, I think, to justify.
“We appreciate that there is transport logistics and a cold chain, the supermarkets themselves have their own costs, in terms of real estate, staff … but a better understanding of what it costs to put our products in the market would be really helpful to better understand when these price differences arise. “
Ginger growers supply wholesale markets
In response to questions from the ABC about the price differentials, a spokesperson for Woolworths said: âUnlike other varieties of product, for which Woolworths buys the majority through direct producer relationships, the ginger comes from wholesale markets, with prices set by wholesalers.
Coles said it paid above-market prices to its direct suppliers.
âWe have long term contracts with ginger growers in Queensland and we are buying a small volume in the Sydney and Melbourne markets to ensure we can continue to meet customer demand year round,â said a spokesperson.
A spokesperson for Aldi declined to comment on the factors determining retail prices for ginger, other than to say that its “prices have consistently been lower than those of its competitors.”
But Growcom’s Richard Shannon wanted more transparency in the prices paid throughout the supply chain.
âThere is no such thing as a perfect market where buyers and sellers have the same power and influence and have the same information.
“These are the things that characterize a well-functioning market and those markets don’t exist in horticulture,” Shannon said.
A spokesperson for the Australian Competition and Consumer Commission said that âneither the Horticultural Code nor the Food and Grocery Code has control over wholesale pricing. or retail â.
The president of the Australian Ginger Growers Association hoped retail prices would stabilize to reflect what growers were paid in central markets.