Predatory Pricing souring citrus fruit growing industry

Australia's citrus growers are receiving a top price of 5c a kilogram for juicing oranges, making it ''the worst season ever'', a Senate inquiry has heard. Quality fruit for juice processing is being dumped as worthless, as growers struggle with a ''predatory pricing'' system that means farmers supplying the $1billion-a-year juicing industry cannot cover production and picking costs, the Senate inquiry into Australia's food processing sector has been told. South Australian growers are calling for an independent inquiry into Australia's citrus juice industry, warning lax labelling laws allow cheap juice concentrate imports to be repackaged and dumped into the market. They are also demanding a mandatory code of conduct for the citrus juice industry and statutory powers to enforce it.

Citrus Growers of South Australian chairman Marcus Chown told The Canberra Times the price for juicing oranges has dropped from $200 a tonne in 2010 to as low as $50 a tonne this year. ''It's tough for growers, because this season has been one of our best. But if you can't sell to the packers and processors at a price to cover your costs, then you have to decide whether to pick and sell at a loss or leave the fruit on the trees, '' Mr Chown said. The price of Australian citrus juice exports is being undercut by 40 per cent on Asian markets by cheaper juice products from developing countries that pay pickers as little as $4 to $12 a day, he said. In Australia, pickers are paid a minimum hourly rate of $20, with good pickers often earning a higher premium rate.

In a strongly worded submission to the Senate select committee inquiry, Citrus Growers SA said world citrus juice supply was falling as a result of the spread of citrus canker in Brazil and the United States. Global juice prices are rising, but ''the price received by Australian growers remains low'', it said. This is particularly the case for smaller growers, who are reliant on packing firms to negotiate a juicing fruit price with processors. The situation for small growers is also complicated by Australia's collective bargaining laws under the Fair Work Act. ''The introduction of collective bargaining laws have made it very difficult, complex and possibly illegal for small producers to come together to negotiate a fair price. In contrast, large commercial organisations have been able to negotiate a higher or even premium price compared to the smaller operators. As a result there is concern that we may be seeing the end of the small family citrus growers,'' the submission said.

Another concern for growers is the juice price ''has traditionally created a floor price within the citrus industry'' which sets the price for the citrus season. Securing a good price for processed juicing fruit at the beginning of the season ''would have a cumulative effect'' on the price for other citrus products, ''which would go a long way to making the industry viable for growers to survive in the future'', the submission said. 

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