How fresh food markets are avoiding Australia’s crippling supply chain crisis

Markets have plenty of fresh fruit, vegetables and meat available and have largely avoided the supply chain crisis that has stripped shelves bare at the big supermarket chains, according to operators and farmers.

Supermarket distribution centres have suffered staff shortages caused by the Omicron wave that has forced as many as a quarter of their workers to isolate, prompting Coles and Woolworths to reinstate purchase limits on some products after panic buying emptied shelves.

However, market stall operators don't suffer from the same problems because they buy directly from wholesale markets, the chief executive of Melbourne's Victoria Market, Stan Liacos, said.

"The way they purchase has far more flexibility in it than the way the far larger multinational supermarket chains do business," he said.

He said the market's 60 fruit and vegetable operators and 10 fishmongers bought most of their stock daily at Melbourne's wholesale markets.

"They basically pick the stock, and if certain stock isn't available from certain suppliers, they simply turn around and buy from others.

"So they're not locked into a handful of huge, watertight, contract-style relationships."

The stallholders have also avoided the bottlenecks caused by staff shortages in the logistics sector, where some companies have reported up to half their workers are unavailable.

"Most of them, I'd say the vast, vast, vast majority are actually transporting themselves - they drive their own trucks," Liacos said.

"So they're not at the mercy of transport companies."

He said this also explained why specialist fruit and veg shops also had plenty on offer.

"They are also usually only buying probably two or three days and weeks in advance," he said. "Whereas the supermarkets, generally speaking through their cold storage requirements, they're accommodating food throughout the year."

Liacos said most of the meat sold at the market is butchered on site by operators, avoiding another bottleneck in supermarket chains - the processing plants where carcasses are chopped up and packed for sale.

"The carcasses come down the line in the morning," he said.

"There might be some niche elements that come in pre-cut, in particular the poultry guys - they're probably not necessarily cutting every chook. The wings could be coming in from a supplier."

The president of NSW Farmers, James Jackson, who is a sheep and cattle farmer, said food markets had a "more robust sort of supply chain".

He said farmers were producing plenty of food despite staff shortages in picking and packing.

"There are individual supply chains that are affected, but a lot of us are still operating, so the markets are still full of produce," he added.

However, he said supermarkets were cancelling contracts with meat producers due to force majeure clauses that enable them to pull out when "the shit hits the fan".

"They can't get any way to kill the animals because the abattoirs are shut down," he said.

"There is some problems with both white and red meat potential supply because in those industries essentially there's a lot of people off sick and a lot of people waiting for a RAT [rapid antigen] test."

Jackson said the partial breakdown of supply chains bringing food from farms to the shelves of Coles and Woolworths raised the question of whether the federal government and the Australian Competition and Consumer Commission had allowed them to become too big.

"You have to ask the question as to whether the ACCC, in allowing the huge dominance of those two supermarkets for fresh food trading, something that we've been critical of for some years, whether that's been prudent, and whether there's other issues - so far as food security goes - that they didn't properly consider."

"It's a mess," said Jackson, "and the laissez-faire approach to competition policy that the ACCC - well, the government - have taken, so far as the laws go on competition policy, in some way has contributed to this."