A farmer group has claimed that seven in 10 house and garden plants in Australia are sold by houseware retail giant Bunnings, raising concerns about the impact of monopoly on farmers.
During a Senate hearing on March 12, Joanna Cave, the CEO of Greenlife Industry Australia (GIA), a peak body representing thousands of farmers growing greenlife products such as seeds, plants, shrubs, and trees, said their industry was dominated by “big box retailers,” with Bunnings accounting for 70 percent of the market.
“There are independent garden centres, but they’re very tiny,” she said.
“They’re important, but tiny is a sector in relation to the big box retailers.”
The CEO also alleged that growers were subject to unfair treatment by big retailers due to a lack of competition in the market.
Specifically, Ms. Cave said a major issue in the sector was that there were very few binding contracts between suppliers and retailers.
“Non-binding supplier agreements have a norm in the sector,” she said.
“The supplier agreements we’ve seen are not enforceable contracts. They’re very simple documents.”
Ms. Cave gave the example that a retailer could encourage several farmers to grow a certain number of plants, but it was not under any obligation to take any plant from any farmer.
Consequently, the retailer may only purchase a fraction of the quantity it told farmers to grow, resulting in significant uncertainty for growers.
In addition, the CEO alleged that there were cases of farmers being pressured by big retailers to sell their products at a loss or forced to use more expensive freight arranged by retailers if they wanted to be part of “the team.”
“We have compiled pages and pages of evidence that’s given to us in confidence,” she said.
Calls to Include Greenlife Industry in Food And Grocery Code of Conduct
While Ms. Cave said it was in the growers’ interest that big retailers continue to thrive, she said the business environment was getting worse as retailers gained more market power.“They are outside any system of regulation. So, there are no checks whatsoever on how they exercise that power,” she said.
“Because they have a monopoly in the market, it’s in the public interest for their behaviour to be more closely examined.”
The CEO then suggested the government include large greenlife retailers in the Food and Grocery Code of Conduct.
At present, the Food and Grocery Code of Conduct is a voluntary code prescribed under the Competition and Consumer Act 2010 that outlines the standards for the behaviour of suppliers, wholesalers, and retailers.
The code only covers the food and grocery sector and does not apply to other industries.
Ms. Cave also proposed for the extended code to be made mandatory to prevent unfair business practices by retailers.
“We see the code as a much easier path to getting somewhere, particularly if it contains meaningful penalties for breaches and a genuinely independent dispute resolution,” she said.
Bunnings Rejects Monopoly Claims
Following GIA’s testimony, Bunnings refuted claims that the company had a monopoly on the industry.“While we respect the role industry associations like Greenlife Industry Association play, we disagree with a number of claims they’ve made and have reached out to them to discuss these matters and better understand the details further,” Bunnings managing director Mike Schneider told The Epoch Times.
The company cited data from IBIS World 2024, which said Bunnings only commanded less than 30 percent of the greenlife market.
At the same time, it said there were a large number of big box retailers, independent nurseries, hardware chains, and online retailers competing in the retail garden supply sector, which was highly competitive.
Bunnings also rejected allegations that the company mistreated growers, saying it was subject to legislation such as the Competition and Consumer Act 2010 and the Australian Consumer Law and had robust processes in place to protect the interest of suppliers.
“We have longstanding relationships with thousands of suppliers across Australia and New Zealand, who all play a critical role in our business and our ability to deliver the best offer and experience to our customers,” Mr. Schneider said.
“We have robust processes in place, including as part of our trading agreements, to ensure those relationships are fair and transparent.
“We have a range of avenues available for suppliers to raise concerns with us, including our anonymous and secure reporting service.”
Lastly, Bunnings argued that there was no need for the Food and Grocery Code of Conduct to apply to the greenlife sector due to the large number of competitors, which was different from the supermarket industry, where a few players controlled the market.
