Aggressive pricing tactics and a weakening processing sector resulted in the Aussie apple and pear industry enduring trying times over the past 12 months.
John Durham, managing director of Apple and Pear Australia said that downward pressure on price from the supermarkets placed significant strain on the industry.
“There was probably a slightly larger crop than is comfortably sold each year in Australia. It gave the opportunity for the retail sector to put a lot of downward pressure on price, and the industry suffered very badly through that,” said Mr Durham told ABC Rural.
Durham says that the push to lower prices in the retail sector resulted in unsustainable farm gate prices for growers.
“It’s hard to rationalise the situation where there is a major push through the retail sector for lower, lower prices, whilst on the supply side, we are having to absorb more in the way of costs.”
According to Durham, increased pressure has resulted in a number of growers exiting the industry altogether.
“It’s a tough choice, but there’s no compulsion to grow apples or oranges or bananas or produce anything in this country. And if financially it doesn’t work out, eventually people are going to leave the industry,” said Durham.
Although 2012 bought significant challenges to the industry, Durham said that 2013 has so far delivered a far more positive result.
“2013 has been a much better year so far. Growers have done quite reasonably with Gala [apple varieties] and the product that they have had in the market. So there is more optimism that 2013 will deliver a much better financial result for the industry.”
Photo credit: dimnikolov via photopin cc