$11.50 for a kilogram of broccoli. $8 a bunch for fresh celery. The price of some vegetables in Australia has gone up considerably recently.
These price increases have led many people to take to social media, accusing major supermarkets and independent retailers of profiteering and price gouging at a time of crisis.
However, Shaun Lindhe, the communications manager for peak vegetable growers body AusVeg, suggests that the price increases have more to do with another story, one that has fallen from the headlines in recent weeks: the ongoing, devastating droughts and bushfires that ravaged Australia over the summer.
“There’s been a reduced supply as a result of drought,” Lindhe says. “There’s also seasonal fluctuations in supply, as production regions transition.”
The reduced supply has coincided with panicked shoppers clearing shelves, driving prices even higher.
On 24 March, ACCC chair Rod Sims directly attributed grocery price hikes to “unnecessary panic buying”, saying: “Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks, both in store and online, which has led to shortages of some products and disruption to delivery services.
“In order to meet that demand growers and retailers have been working to try and keep that supply on supermarket shelves,” says Lindhe, “and as a result some of the production costs in terms of labour and transport have gone up.”
In January, well before the novel coronavirus crisis hit Australian shores and shifted consumer behaviour, growers warned of a 50% increase in vegetable prices. Now a supply shortage is coinciding with a spike in demand.
Matthew Broadbent, a produce manager for Green Green Grocer, a small vegetable box delivery service in Melbourne, has noticed the price hikes at a wholesale level.
“It is across the board, but especially broccoli, celery and cauliflower,” Broadbent tells Guardian Australia. “As a percentage, we’re looking at as much as double in some cases … Prices do go up and down at times, but I’ve never seen it like this before.
“At the moment our margins are a lot slimmer,” Broadbent says, although he has seen an increase in customers over the last few weeks too.
Broadbent’s experience chimes with statements from Coles and Woolworths. “Coles has seen wholesale price increases on some fresh produce lines due to factors including limited availability as a result of bushfires and drought,” a representative tells Guardian Australia.
A Woolworths spokesperson, meanwhile, says: “Due to pressures throughout the horticultural supply chain caused by drought, unseasonal weather and an unprecedented spike in demand, we’re currently seeing an impact on the availability of some fresh fruit and vegetable lines. This has led to higher wholesale costs for some fruit and vegetable lines across the market.”
“The price of vegetables, like many commodities, is set by supply and demand,” says Lindhe.
Both supermarkets firmly deny price hikes are a result of profit-seeking, with a Coles spokesperson saying that “Coles has absorbed some of these increases”.
“I haven’t heard of any reports of price gouging,” says Lindhe. “The situation we’ve got at the moment is that the level of supply has lowered … and that coupled with the increased demand … as a result the prices have gone up.”
Because the “vast majority” of fresh vegetables available in Australia are grown locally, Lindhe does not expect international supply chain issues caused by the Covid-19 crisis to impact Australians.
Lindhe is optimistic that the situation will resolve itself soon. “As availability of fresh produce increases over time, as we expect it will, demand levels will resume to what we normally expect for this time of year, and as a result of that, price will lower to reflect the increased availability.”
In the short term, major supermarkets have also relaxed their specifications for the size and cosmetic appearance of vegetables, in order to increase supply, ABC reports.
While the Covid-19 crisis and drought have driven vegetable prices up, Australians can look forward to cheaper high end seafood this autumn, as export demand for Australian seafood plummets.
Josh Pearce, of the Fish Shoppe in Melbourne, tells Guardian Australia that the price of rock lobster has almost halved in recent months. “The main market was China and retailed at Christmas for $150. It has now dropped to $100 when the Chinese market closed and this weekend we will be selling at $85 a kilogram, which is nearly half of its original price.”
Pearce notes that mud crabs and sashimi-grade yellowfin tuna are also particularly cheap at the moment, as restaurants and export markets close. “Australians can now enjoy higher-end species … at bargain price.”