Coles supermarkets Australia good

Australian supermarket chain Coles today (January 31) began slashing the price of some fresh fruit and vegetables by up to half, marking the latest round in the country's supermarket discounting war, reports the Australian press.

The move, which will see some produce prices drop by 50 per cent, is likely to put pressure on Coles' competitor Woolworths and other independent retailers to follow suit.

Coles claims the price cuts will help Australian growers dealing with bumper fruit and vegetable crops (as well as the high Australian dollar) this season, but other pundits fear widespread discounting could squeeze farmer profits.

Australian Greens Senator Christine Milne told abc.net.au that, while cheaper fruit and vegetables are good for consumers, farmers need to be paid properly to keep their land. 

"The concern I have is with Coles entering into this agreement with farmers, Woolworths will of course follow suit," she said. "The result will be, yes, cheaper supplies of fruit and vegetables for the community, and that has to be balanced through with making sure that farmers have a decent farmgate price." 

A spokesperson for Woolworths said the current produce oversupply means there are already significant reductions in fresh fruit and vegetable prices, but that it would look at which lines Coles had discounted. 

Australia's Council of Small Business has criticised Coles' cuts, and is lobbying the federal government to break up the power of Coles and Woolworths.

The produce price cuts come after earlier battles between Australia's two main retailers, who have tried to undercut each other on staples such as milk and bread.