Big supermarkets are contemplating the mass importation of fruit and vegetables - and are already stocking shelves with damaged produce from local growers desperate for cash after the floods. In what looms as a dilemma, Coles and Woolworths are weighing up whether to support Australian producers and sell their water-damaged crops ?a or favour imports and keep prices down. Coles is already selling so-called ugly fruit, which has blemishes, relaxing its quality classifications to keep shelves stocked. Woolworths said it would do the same with some products. Treasurer Wayne Swan yesterday warned households they will ''inevitably see a spike in prices at the checkout'', particularly fruit and vegetables, after flooding wiped out large parts of eastern Australia's food bowl.
''While this is likely to be temporary, it will take a toll on family budgets for some time,'' said Mr Swan, who will give the first Treasury estimates of the floods' economic impact on Friday. The price of watermelons, sweet potatoes, broccoli, zucchinis, bananas and capsicums have already soared ''significantly'' at wholesale markets, according to the government's agricultural forecast bureau. Tomatoes, mangoes and lettuce have also taken an immediate hit. But supermarkets warn that the real danger is the impact on the autumn and winter growing season when Queensland traditionally feeds the nation because of the state's moderate climate. Coles and Woolworths, controlling 45per cent of fruit and vegetable sales, are trying to determine how quickly growers can recover to supply winter salad staples, as well as potatoes, chillis, corn and cabbage that should be planted now to come out of the ground from April to June.
Planting has been disrupted by lost topsoil, and smaller crops will lead to shortages.''This is the balance we need to strike. If, across the board, there are significant price rises of major dinner staples, importing would have to be something we would potentially contemplate,'' a Woolworths spokeswoman said. A Coles spokesman said: ''There may be shortages and there may be higher prices ... in the next month we'll have a much better feel for the full impact of the floods, what that will mean for domestic production, and if we need to look at imports.'' Woolworths is due to outline its quarterly sales results to investors today, and investors will be expecting guidance on fruit and vegetable price increases that some economists expect to hit 4 to 6per cent this year.
Australian Fruit and Vegetable Chamber president Bill Chalk agreed that shoppers could become more inventive in the kitchen substituting cabbage and onions in a salad instead of lettuce, for example to avoid soaring costs. Coles said it had ''relaxed our quality specifications so that we can sell fruit and soft vegetables that have been rain damaged, and we have encouraged our customers to buy those to support Australian farmers''. Woolworths said it would offer some types of fruit and vegetables for sale with surface blemishes, but faced consumer resistance. ''It's very difficult,'' a spokeswoman said.
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