Five days a week, while most of us are still asleep, Grant Nichol drives to the Melbourne fruit and vegetable wholesale market to haggle and sell fresh produce.
But that routine could be under threat after the Victorian government revealed plans to double rents at the site over the next decade.
Mr Nichol said, as a result, the wholesale market — where farmers who did not supply Coles or Woolworths often sold their wares — was under threat.
“If the market’s not a viable proposition, it really takes away the opportunity for those growers to sell their produce, which is tough,” Mr Nichol said.
Last week the Victorian government-owned Melbourne Market Authority revealed rents for traders would rise between 6 to 7.6 per cent each year for 10 years.
Melbourne wholesale market traders protest over rent rises at the Epping site. (Supplied: Fresh State)
The news prompted angry protests at the Epping site this week, with traders taking to forklifts to demonstrate.
However, the Melbourne Market Authority has defended the rent increase and relied on data from the Valuer-General of Victoria.
A supermarket alternative
The wholesale market is Victoria’s largest fruit and vegetable trading centre where many independent supermarkets source produce and items from other food vendors from the Queen Victoria and South Melbourne Markets.
Mr Nichol is a fourth-generation wholesaler at Flavourite Marketing and a farmer who grows hydroponic tomatoes, capsicums, cucumbers, and blueberries at four Victorian sites.
He said the Melbourne market was essential to smaller farmers who did not have supermarket contracts or produced fruit and vegetables that did not meet supermarket specifications.
Grant Nichol’s Flavourite business grows hydroponic tomatoes, capsicums, cucumbers, and blueberries across Victoria. (Supplied: Flavourite)
“If a grower can’t sell the stuff that’s outside [supermarket] specification range, and they can only sell 75 per cent of what they grow, it would be a real struggle,” he said.
He said the rent hikes would mean his business would pay an extra $300,000 in 10 years’ time, a difficult proposition in an operation already running on slim margins.
Mr Nichol said he might have to scale down operations to cope.
“We work long hours in a part of the day when probably most of Melbourne is asleep,” Mr Nichol said.
“It’s a real challenge, and the added cost of that rent is going to be a real struggle for generational families that are doing it tough.”
The Melbourne Wholesale Fruit and Vegetable Market at Epping, in Melbourne’s north, is one of six central fresh produce markets across Australia. (ABC News: Joseph Dunstan)
Fresh State is a member organisation representing wholesalers and associated industries at the market.
Chief executive Jason Cooper said wholesalers could be forced out of business and the cost of fresh produce would skyrocket at a time when prices had already soared.
“The wholesalers can’t absorb this — the majority of this increase will be passed onto customers,” Mr Cooper said.
History repeating?
It is yet another controversy for the Epping market site.
Wholesalers were forced to relocate there in 2015 from the old Footscray market site, and in 2013 the Supreme Court ruled rents needed to remain the same as the old site for a period of time.
“No-one wanted to go, and it was actually … a judge who decided these tenants would move to this new facility on the same rents that they had in West Footscray,” Mr Cooper said.
“The government controls this site, it’s absurd and unbelievable to think they can apply this kind of rent increase.”
The chief executive of independent supermarket Ritchies IGA, Fred Harrison, said the rent increase was excessive.
Ritchies IGA chief executive Fred Harrison says the rent increase will “absolutely” have an impact on Victorian food prices. (ABC News: Kyle Harley)
He said some of his suppliers who traded at the market believed it would “absolutely” impact food prices.
“Generally you would expect rent in line with [inflation] … these fruit and veg operators are not in the position to absorb substantial rent increases,” Mr Harrison said.
“It will add to the cost per box of any produce, and it will be reflected in higher retail prices.”
Authority defends rent rise
Melbourne Market Authority chairperson Peter Toohey said rents had previously been frozen during the pandemic, and the authority relied on data from the Valuer-General Victoria to set the new rents.
“We’ve got a big facility to manage, and we need to be able to have enough funds to be able to do that,” he said.
Mr Toohey said independent research they commissioned about the impact of the rent increases showed food prices would only increase by 6 to 8 cents for a $60 to $90 basket of groceries.
Many vendors at popular Melbourne fresh food markets such as the South Melbourne Markets buy supplies at the Epping wholesale markets. (ABC News: Iskhandar Razak)
The Melbourne Market Authority did not provide a copy of this report to the ABC.
“The main driver for fruit and vegetable prices is availability of supply, so it’s seasonal conditions [and] demand,” Mr Toohey said.
Premier Jacinta Allan also defended the move and said it was appropriate to increase rents at the Epping market over the next 10 years.
“The new modern Melbourne market at Epping is a great facility and we will continue to work with those stallholders to support them into the future,” she said.
