Fruit and Veg

Reporter: Rodney Lohse

He was one of the toughest rugby league players to take the field, playing 45 tests for Australia and 35 Origin games for Queensland. Mal Meninga is also a great tactician winning a record 4 State of Origin Series in a row as coach, but he may not win what could prove to be his ultimate battle.

Gary Grienke teamed up with the legendary Mal Meninga 12 months ago and opened three Meninga Fresh Fruit and Vegetable shops -- one outside a Woolworths at Taigum on Brisbane's North side -- and It's here they've run into some very tough opposition. "They particularly attacked us on all the key elements of a fruit and vegetable shop and they are tomatoes, potatoes, lettuce and those sort of lines, bananas", said

It's the same story as independent fruiterer Peter Chahoub who contacted us with 2 years ago. Peter bravely stood alone as part of a Today Tonight investigation into predatory pricing -- an investigation that showed Woolworths would stop at nothing to win a fruit and vege war, selling produce below cost price if necessary.

Just days after the ACCC introduced new laws to curb predator pricing, Woolworths launched what can only be described as one of the craziest cost cutting moves you are likely to see. In a few short hours, one Woolworths store slashed the nationally advertised special price on bananas from a $1:97 to just 30 cents

Today Peter Chahoub no longer runs his fruit shop -- he went under trying to fight Woolworths. Interesting too is two years ago a Woolworths on Brisbane's Southside was one of the cheapest for fruit and vegetables. Today it's one of the most expensive, as we found in our recent grocery survey.

But that price war was far from a one off. Around the same time, 25 year veteran of the fruit and vegetable game Thierry Blondeau was fighting off Woolworths at two of his fruit shops -- one in Noosa on the Sunshine Coast and one on Brisbane North side. "You had all the Woollies' management there standing in front of the shop, having a look and walking through the shop. Well, if that's not intimidation, what is?" Thierry said.

The result was the same -- just like Peter, Thierry went to the wall. Gary Grienke and Mal Meninga took over Thierry's shop at Taigum hoping they could weather the storm, using Mal's profile. But it seems being a hard man on the field counts for nothing when you play against Woolworths.

Take a look at the prices on some of the products at Meninga Fresh and then Woolworths next door: Rockmelons at Meninga's are $2.99 next door they're$2 dollars cheaper at 98 cents. So you have to become suspicious that this is undercutting and perhaps even predatory pricing when you see that at two nearby Woolworths -- with no fruit shop nearby -- Rockmelons are $3.42.

Then the pricing on pumpkins -- at Meninga's they're a1.99 a kilo next door 75 cents, but at the two other Woolworths a massive 2.98, Its the same again on Asian Puk Choy -- Meninga's is selling them for $1.99 the Woolworths store has them for 98cents, unless you shop at the two with no competition, where they're $1.98.

Woolworths refutes any claim they engage in predatory pricing. Take the rockmelons for example $3.42 each at one Woolworths and just 98 cents down the road at Taigum, next to Mal's shop. Well at first we were told they were perhaps from different suppliers -- a bit more investigation and we found they were from the same farm. Then it was perhaps the rockmelons here were of a better quality therefore more expensive. As for the puk choy well that was part of special buy and there was enough for only 80 stores, so Taigum got the special priced produce and the other store, the more expensive. In no way was it related to Mal's fruit shop being next door and no case was it predatory pricing because that's illegal.

For Woolworths' Clare Buchanan, it is just normal fluctuations of supply and demand and nothing underhanded. "The ACCC inquiry last year did a very thorough and very rigorous investigation into the whole supermarket sector and it found that the sector was competitive and it's getting even more competitive", she said.

"the sheer size of Coles and Woolworths distorts the grocery market, its anti-competitive, it means consumers end up paying more than they need to because Coles and Woolies have such a dominant role in the market and that squeezes out competition", said Independent Senator Nick Xenophon.

Senator Xenophon, along with Senator Barnaby Joyce, has a plan in the form of a private members bill. "Put simply what the Blacktown Amendment says to a big chain is that if you discount there you need to discount everywhere -- that way it stops the big chains from picking on the independents and pricing them out of the market", Senator Xenophon said.Mal and Gary know what they see everyday -- they just hope they don't go broke waiting for help.

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