Fruit and vegetable wholesalers are calling on the Melbourne Market Authority (MMA) Board to resign over a major rent dispute.
The Government-owned MMA, which serves as the market's landlord, plans to increase the annual rent for its wholesaler tenants by over 100 per cent over the next 10-years.
Speaking on behalf of its wholesaler members, Fresh State CEO Jason Cooper said the proposed rent increase is a “complete stuff-up”. Mr Cooper said the MMA’s “grab for cash” - in the form of a future rent roll - would not only push fruit and vegetable prices up, but also push wholesalers out of business, and push families, restaurants, and grocers to the brink.
In a scathing attack on the MMA, Mr. Cooper said the Board and its CEO had utterly lost the trust of market tenants because they:
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No longer represented or advocated for the interests of wholesalers.
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Had promoted and defended the rent increase via the media prior to any decision having
been made, which had angered and frustrated wholesalers.
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Lacked an understanding of the wholesale industry and had made no effort to educate
themselves about it.
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Were making it nearly impossible for Victorian wholesalers to compete against other
interstate central markets.
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Had shown no care for the impact of the rent increase on the availability and affordability of
fresh fruit and vegetables as an essential service.
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Had no understanding of how the rent increase will damage the lives and livelihoods of
wholesalers and independents, such as grocers, supermarkets, and restaurants, who rely on
wholesalers.
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Were in direct violation of the Melbourne Market Authority Act 1977, which mandates a
“fair and competitive environment for the wholesale trading of produce”.
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Had taken steps to decentralise the market rather than foster unity, which was a primary
objective when the first wholesale market was established in 1878.
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Failed to recognise that the rent increase will discourage people from consuming fresh fruit
and veg, and pile on more cost-of-living pressures.
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Once again had let down wholesalers, further eroding their trust.
“The MMA appears to have lost sight of why the wholesaler market was established back in 1878. It was never intended to be a profit-making venture at the expense of wholesalers, yet that's precisely the path the MMA is now taking,” Mr Cooper said.
Fresh State today launched its Take the Pressure Off Campaign on behalf of its wholesaler members, aiming to take the pressure off fruit and vegetable prices and temporarily freeze rent at the wholesale market. Mr Cooper said the Campaign sought to establish a viable, long-term commercial arrangement for wholesalers. He emphasised the Campaign would gain momentum in the coming days and weeks.
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Questions and Answers
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How much is the proposed rent increase for wholesalers at the Epping Fruit and Vegetable Market?
The increase in rent to be paid by wholesalers will be between 6.72% and 7.6%, compounding year on year for 10 years, meaning it will more than double in that time.
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How will the rent increases impact wholesalers, retailers and growers?
This will have a significant impact on wholesalers as it will reduce their margins considerably, meaning they will inevitably have to pass the burden on to growers and independent retailers. This will also affect other buyers including restaurants, childcare centres and aged care homes. The rent increase may also force some wholesalers out of the market, as they will no longer be viable. The rent increase also has the potential to reduce competition as it will be too expensive for new wholesalers to enter the market.
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Is the rent increase likely to be passed on to consumers?
Yes, the rent increase will be passed on to consumers. Ultimately, consumers will pay a higher price for fresh fruit and veg as retailers will be forced to increase their prices.
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How much will the price of fresh fruit and veg increase?
The wholesalers, growers and retailers understand the current cost of living crisis so while they continue to reduce their own margins where possible, with a massive 7.6% annual increase in rents, some of these costs will be passed on so consumers should expect their fruit and veg costs to increase.
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When will the fresh fruit and veg price hikes kick in?
The Melbourne Market Authority (MMA) has indicated a November timeline for the rent increases. Consumers should expect to see prices rise after this.
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How will stopping the rent rises keep fresh fruit and veg prices down?
By stopping the proposed 100% rent hikes, we can help keep operational costs for wholesalers, retailers and growers stable, reducing the pressure to raise prices on fresh produce. This will ensure fresh fruit and vegetables remain affordable (and accessible) for consumers, while supporting local businesses.
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What kind of support or relief would you like to see from the government to help alleviate the financial burden of these rent hikes?
Zero rent increases. Victorian wholesalers already pay more for rent than in other States (e.g.: Brisbane market). We need to keep fresh produce affordable for everyone. -
Is there potential for the rent increases to compromise the quality of the produce supplied by wholesalers?
We’re committed to maintaining high standards, but with tighter margins, it becomes more difficult. We’re actively working to avoid any drop in the quality of the fruit and veg supplied.
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Why do you think the MMA is increasing rents so significantly?
We don’t know, but we suspect they may be moving towards privatisation- so they can sell the market for a higher price. It seems they’re more worried about clearing their debt and driving up the sale price of the market facility for any perspective buyer rather than the effect it will have on the wholesalers, retailers, growers and consumers.
Key Facts:
The Vic Government owned Melbourne Market Authority is imposing unrealistic rent rises on wholesalers meaning the cost will be passed on to Victorian families who will pay more for their fruit and veg.
About us:
For more information about Fresh State visit https://www.freshstate.com.au/
For more infromation about the Take the Pressure Off Campaign, visit https://www.freshstate.com.au/PressureOff/
Contact details:
Adi Stevens, RoyceComm, 0407 411 088, adi@royce.com.au
