27 Mar 2020

Covid-19: Why do fruit and vegetable prices seem so high?

From Checkpoint, 5:38 pm on 27 March 2020

The supermarket panic-buying seems to have calmed down, and stores are reporting a return to some sense of calm since the lockdown began. 

Prices have been high for many necessities as people stockpiled, but one food group that doesn't work well with stockpiling is fruit and vegetable. 

Fruit and vege retailer Glenn Forsyth said panic buying had affected prices, and smaller stores like greengrocers needed to be allowed to continue trading. 

"Demand exceeded supply by a long shot," he told Checkpoint.

"Shelves have been emptied, now shops will have to sell their expensive stock first and as products start to build up again you'll see prices fall at the market and you'll see prices fall next week at retail too."

The problem of high prices lies with panic buying putting pressure on supply chains.

"Had people just bought supplies for two to three days at a time we wouldn't have experienced these super high prices and then a crash," Forsyth said.

''Produce is very sensitive to the supply and demand model but the growers want to let people know, we are not going to run out of fruit and vegetables in New Zealand."

And what happens to the stock that big supermarkets usually don't take and it goes to grocery and independent stores? 

Forsyth said some of the misfits and odd bunch ranges would go to supermarkets but it was a problem that needed addressing.
"There's a lot more produce than this to go around which is why we need the greengrocers to stay open and keep competition alive with prices to us, the public ... with restaurants, greengrocers and independent stores closed, the supermarkets have tripled their business overnight. This puts an incredible amount of pressure on the supply chains to these stores, not to mention that they have more of a captive audience and can charge handsomely as a result.

"It's not only the greengrocers but the butchers and bakers too, we're pushing people away from other outlets and confining them even more in one spot."

He said he had been speaking to producers across the country who overnight have been left with backlogs of fresh stock that will likely have to be dumped. 

"The independents got a raw deal, no notice, they just had the rug pulled out from under their feet," he said.

"In supermarkets, the plastic guards at the checkouts, I bet the independents didn't know about that a couple of weeks ago and the supermarkets did, so I really think the independents have been served a raw deal."

He said he hoped they applied to the Ministry for Primary Industries or support as the deadline was 5pm Friday.

"Hopefully they'll be allowed to stay open from next week for the benefit of small businesses, staff and growers because we do need them to stay open and if they are playing by the rules, there's no reason it won't be safe."