Fuel surcharges of up to 65 per cent of shipment value are now hitting rural fresh produce growers, and if Australia’s major supermarkets fail to engage with price increase requests quickly, the growers making planting decisions today may not be there for the next harvest. That is the uncomfortable commercial reality sitting behind a formal open letter now on the desks of Coles, Woolworths, and Aldi.
The National Farmers Federation’s (NFF) Horticulture Council has written directly to the country’s leading supermarket chains, asking them to respond “promptly and constructively” to price increase requests from suppliers. The letter, prompted by rapidly rising fuel and freight costs, frames the issue not as a negotiation tactic but as a supply chain continuity concern with direct implications for food security.
What Is Driving the Cost Pressure on Fresh Produce Growers
Fresh produce is one of the most logistics-intensive categories in grocery retail. It moves by refrigerated truck across long distances, often from regional growing regions far from capital city distribution centres. When fuel costs spike, the compounding effect on refrigerated freight is sharper than on ambient goods, and the margin buffer for fresh produce has never been generous.
Scott Kompo-Harms, CEO of Queensland Fruit & Vegetable Growers, confirmed that freight companies are applying fuel surcharges that have risen rapidly, with growers in rural areas furthest from capital city markets absorbing the heaviest blow. A surcharge reaching 65 per cent of shipment value, applied on top of already-compressed margins, leaves many growers in negative territory on individual loads.
The NFF Horticulture Council has framed this as a structural issue, not a temporary blip. Rising fuel costs trace back to broader oil market conditions, and there is no near-term signal that freight surcharges will normalise without a corresponding adjustment to farm-gate pricing. For category buyers at the major chains, that context should be shaping how they assess incoming price requests right now.
What the Horticulture Council Is Asking Coles, Woolworths, and Aldi to Do
The council is not calling for automatic price increases or unilateral changes to supply agreements. Its ask is commercially specific: that supermarkets engage with supplier price increase requests as a matter of priority, in a way that reflects the documented cost pressures growers are currently facing.
Jolyon Burnett, chair of the NFF Horticulture Council, was direct about what is at stake. “Supermarkets are critical partners in the fresh produce supply chain. How they respond to these cost pressures now will directly influence whether growers have the confidence to keep planting, investing and producing for the future,” he said.
Burnett also made the food security argument explicit. “Supporting growers through periods of acute cost pressure is not only fair, but also essential to safeguarding the nation’s food security.” That framing shifts the conversation from a bilateral commercial dispute to a national supply risk that sits, at least in part, within the supermarkets’ sphere of responsibility.
| Party | Role in Supply Chain | Current Position |
|---|---|---|
| NFF Horticulture Council | Industry body representing horticulture growers nationally | Calling on supermarkets to respond promptly to grower price increase requests |
| Queensland Fruit & Vegetable Growers | State-level grower representative body | Reports fuel surcharges up to 65% of shipment value in rural areas |
| Coles, Woolworths, Aldi | Major supermarket chains and fresh produce buyers | No public response confirmed at time of writing |
| Freight carriers | Cold chain logistics providers | Applying rapidly rising fuel surcharges, heaviest impact in regional markets |
Where the Limits of This Open Letter Sit
An open letter from an industry body is a public pressure tool, not a legal mechanism. The NFF Horticulture Council cannot compel supermarkets to accept price increases, and historically the power dynamic in fresh produce negotiations has favoured large retail buyers over suppliers by a significant margin.
None of Coles, Woolworths, or Aldi had publicly responded to the letter at the time of writing. The Australian Competition and Consumer Commission (ACCC) recently updated its rules on supplier disclosures for the big three, adding regulatory texture to the broader supplier-retailer dynamic, but those changes do not govern response timelines on individual pricing requests.
Supermarkets are not without their own commercial pressures here. Shopper sensitivity to fresh produce pricing is acute, and any farmgate increase will eventually become a question at the checkout. That tension does not dissolve simply because the cost case is well-documented on the grower side.
Who Stands to Benefit Most If Supermarkets Respond Constructively
If the major chains engage in good faith, the growers who benefit first are those in regional Queensland and other areas where freight surcharges are highest relative to their margins. Larger commercial growers with existing supply agreements are better positioned to negotiate than smaller operators who may lack the volume to compel a formal review. The timeline is pressing — planting decisions being made now will determine fresh produce availability in the next season, and confidence among smaller growers is already fragile.
Why the Supermarket Response to This Letter Will Be Telling for the Whole Sector
Australia’s fresh produce supply chain has been under sustained pressure for several years, through floods, drought, labour shortages, and now a fuel-driven freight cost spike. Each event tests whether commercial relationships between growers and supermarkets are genuinely reciprocal or structurally one-sided. From where I sit covering this industry, the pattern is consistent: cost shocks reach growers faster than pricing relief flows back downstream.
The transparent supplier relationships the NFF Horticulture Council calls for are not a new aspiration — they surface in almost every major cost disruption in Australian fresh produce. What is different now is the regulatory environment. The ACCC’s recent actions on supplier disclosures, combined with heightened public scrutiny of supermarket market power, mean that a slow or dismissive response carries reputational and commercial risk it may not have carried a few years ago.
Whether the major chains act before the next planting window closes will say more about the real state of supermarket-supplier trust in Australia than any industry roundtable has managed to establish. If you are a supplier or category manager currently navigating a price increase submission, this letter sets a sector-wide benchmark worth referencing in your next negotiation review.