A PRICE war over fresh fruit and vegetables has prompted politicians to call for an overhaul of Australia's competition laws, with several MPs predicting the short-term consumer benefit could spell the end of Australia's agriculture sector.
Coles' decision this week to cut the price of selected fruit and vegetables by up to 50 per cent has triggered a new price war with Woolworths, which says it will meet or beat many advertised Coles prices today.
''Claims of massive price cuts by any retailer in fresh produce over the last 12 months should be critically examined,'' Woolworths' fresh food general manager, Pat McEntee, said.
''The fact is, there have been significantly lower fresh produce prices recently due to an oversupply of stock. This has been well documented by the industry and the Australian Bureau of Statistics.''
But the opposition spokesman for small business, Bruce Billson, said assurances were needed the price cuts were not an aggressive approach by powerful interests to control the supply chain.
''The concern that the Coalition has is that there's an enormous power imbalance in the supply chain, between the big supermarkets and smaller suppliers, and where that market dominance is detrimental to suppliers in the longer-term, consumers will also be disadvantaged,'' Mr Billson said.
Outspoken Queensland Independent Bob Katter was more pessimistic and said Australian farming was on the brink.
''Clearly Coles intends that there be no fruit and vegetable growers in Australia. We are already a net importer of fruit and vegetables,'' Mr Katter said. ''Within four years the country will not be able to feed itself. Do you seriously think our farmers can work for less than they are working for now?''
But the government's competition spokesman, David Bradbury, welcomed the price reprieve for consumers.
''Producers and farmers are also entitled to get a fair price for their produce and the government has confidence that farmers and supermarkets will continue to work together to ensure the long-term viability of primary production in Australia,'' he said.
Farmers were concerned about another food price war.
''Certainly in the milk sector we know that depressed prices mean that the farmers will focus very much on their future in the industry, what they should be doing, whether they should be increasing or decreasing production,'' the National Farmers Federation president, Jock Laurie, said.
And for the humble independent grocer, such as Joseph Galluzzo in Glebe, there are real fears they could be priced out of the business.
''It will be like what happened to the milk,'' he said. ''It's going to be harder and dearer for us because the prices of stock will go up again.''
with Elizabeth Pratt and Colin Kruger