Bungowannah farmer claims Coles and Woolworths are overcharging consumers for meat

Bungowannah beef farmer Andrew Watson said livestock prices had dropped by half within the last 12 months, yet supermarket prices "haven't budged".

"Prime lambs and prime steers have reduced by 50 per cent, but there has been no reduction at all from Coles and Woolies, and that's because we have a duopoly and no competition," he said.

"For me, the supermarkets are taking the Australian consumer for a joke.

"When the farmers are getting 50 per cent less, I would think maybe 10, 20 or 30 per cent should flow on to the consumer, but it's not."

According to the Department of Agriculture, Fisheries and Forestry, the wholesale price of beef (eastern young cattle) as of August 30, 2023, was 499 cents a kilogram, marking a 50 per cent decline from the same time last year.

Similarly, the wholesale price of lamb (eastern states trade lamb) as of August 23 has decreased by 41 per cent from last year.

Mr Watson attributes this sharp price decrease to an oversupply of livestock in the market.

He said the wet conditions of the last four years caused livestock numbers to swell.

Then, when the Bureau of Meteorology forecast a dry El Nino pattern in February 2023, "farmers panicked and offloaded stock early, which created a market flood".

"We all knew these prices wouldn't last, but everyone is shocked that it has gone as far as it has," Mr Watson said.

Data from NielsenIQ shows that in the last 12 weeks, retail beef prices are down 4.9 per cent, while volume purchase is up 7.1 per cent.

A spokesperson from Meat and Livestock Australia said when it came to retail prices for red meat, there was generally "a lag between prices at the saleyards and prices at the checkout".

"Often retailers pencil in long-term prices for products like scotch fillet, which make them slow to adjust when prices overall change," they said.

"As seen in the past 12 weeks, though, it's clear that prices for beef in particular are decreasing and we anticipate prices to decrease further going forward as processors catch up to the massive supply."

A Coles spokesperson has responded to Mr Watson's claims, stating that the supermarket has recently lowered the prices of red meat products.

"There are many factors which influence retail shelf price, including the price of livestock," they said.

"The price of Australia's most popular dinner ingredient mince has gone down, including on more than 25 different varieties of beef, pork, and lamb mince.

"Additionally, we have dropped the price of Coles whole lamb leg roast from $12 to $10 per kilogram."

Meanwhile, a Woolworths spokesperson said its chain had now dropped the price of 45 red meat products.

"We partner directly with our suppliers to agree on fair livestock prices that reflect market dynamics, as well as the high quality of their meat," they said.

"We will continue to look for opportunities to deliver value on top quality Australian meat, like our lamb leg roast, which is now $10 per kilo."

Woolworths said meat processing costs, from labour and transport to electricity, had driven the price of meat up while livestock prices had gone down.

But Mr Watson wasn't buying it.

"They'll divert blame and say there's labour shortages, there's meat in cold storage, there's COVID supply chain issues, packaging issues," he said.

"Well, we've heard that for 12 months; it's getting to the point where it's just a bit embarrassing now."

In August, Coles and Woolworths recorded profits above $1 billion, with a nearly 5 per cent increase on the previous year.

A significant part of these profits are from the groups' grocery arms, with Woolworths seeing a nearly 20 per cent rise in earnings while Coles recorded a 2.9 per cent rise.

Mr Watson said the supermarkets could get away with upping prices during a cost of living crisis because "there's no competition".

"The two supermarket giants do it together; it's a duopoly, and it has been that way for a long time," he said.

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