Fruit and vegetable prices to lift because of wholesale market shift
The relocation of the Melbourne Wholesale Fruit and Vegetable Market from Footscray to Epping is expected to hurt everyone in the fresh produce industry, from wholesalers to retailers and consumers.
A statement from the Minister for Major Projects, released on December 13th 2012, projects that rents for stores at the new Epping market are to rise from current $273 per m2 at Footscray to $450 per m2 at Epping. For storeholders, the new rents represent a 64.8 per cent increase per square metre on current rents.
A report by The Age on December 15th 2012 speculated that the price of fruit and vegetables in Victoria is set to soar by as much as 30% in 2014 as a result of the move. However, Shane Schnitzler, president of Fresh State, a representative body comprising of more than 120 wholesalers, said the sharp rent increases would exacerbate the market dominance of Coles and Woolworths. This is because instead of buying through the wholesale market like greengrocers, caterers and restaurants, these major supermarket groups deal increasingly with direct suppliers.
The expected rise in vegetable prices is due to the enormous rent increases and a lack of space at the new wholesale market, which will drive the cost of fresh produce up and onto consumers.
According to a report by the Victorian Auditor-General’s Office (VAGO), tabled on March 14th 2012, the relocation will cost more than double its original estimated cost, and is expected to open in 2014-2015, six years later than the planned opening date. The Auditor-General has criticised the project for “poor project implementation” which has “damaged the government’s reputation”.