Fresh fruit and veg prices set to soar by 30%
Illustration: Matt Golding.
THE price of fresh produce in Victoria is expected to soar from 2014, when wholesalers face big rent increases and a lack of space at the new $600 million fruit and vegetable market in Epping.
While average rents will rise by 65 per cent at the new complex, many traders said they faced a twofold increase in costs if they moved to smaller stands at Epping, which would be passed on to consumers.
''We'll have to put those costs back to the client. What choice do we have?'' said Sculli & Co director Phillip Basile, who estimated the price of some fruit and vegetables could rise by more than 30 per cent.
Mr Basile said many family businesses would be ruined by the rent increases, which would also undermine Victoria's competitiveness with other states.
''I've got a 16-year-old son who wants to come into the business, but I've had to put a stop to that,'' Mr Basile said.
The disaster-prone relocation of the market to Melbourne's north has been further hampered by the sudden resignation on Thursday of Melbourne Market Authority chief executive Allan Crosthwaite, who was responsible for overseeing the move from West Melbourne.
Mr Crosthwaite announced his departure on the same day traders were informed of the sharp rent increases for new leases at Epping. He said the timing of his resignation was a coincidence and he had told MMA chairman Neil Lowe of his decision to accept another job a week earlier.
The development is already six years behind schedule and more than $300 million over budget, which recently attracted criticism from the auditor-general in a scathing review of Major Projects Victoria.
Sam Cutrale of TC Produce estimated the cost of some fruit and vegetables could rise by as much as 50 per cent, when the market opens in July 2014.
Mr Cutrale said the government had also paid $6.57 million in compensation to wholesalers forced to accept smaller stands when they relocate to Epping. ''How can you build a brand new market and then expect us to accept smaller stands? We'll be forced to buy more space, which is obviously going to add to our costs, and we still haven't found out how much we're going to pay for warehousing.'' he said.
Minister for Major Projects Denis Napthine insists the modern facilities at Epping will contribute to cost savings. Mr Napthine said the Baillieu government had also reduced the debt of the Melbourne Market Authority by about $100 million, which would not have to be repaid by tenants.
''The traders are moving from a clapped-out Volkswagen to a Holden Statesman. We inherited a disaster from the Labor government. Had they stayed in power, traders would be facing a doubling or tripling in rents,'' Mr Napthine said.
Shane Schnitzler, president of Fresh State, which represents more than 120 wholesalers based at the West Melbourne market, said the sharp rent rises would further consolidate the market dominance of Coles and Woolworths, who increasingly deal directly with suppliers.
Mr Schnitzler said the traders would prepare a bid to buy the market for $120 million from the government and operate Epping as a private facility. He said Fresh State would also consider building its own warehouse facility opposite the Epping market.