Bunnings Allegedly Dominates the Garden Plant Industry, Farmer Group Claims
The Australian garden plant industry is facing allegations of a monopoly by retail giant Bunnings, with farmer group Greenlife Industry Australia (GIA) claiming that the hardware company holds a staggering 70 percent market share. The CEO of GIA, Joanna Cave, expressed concerns about the impact of this monopoly on farmers during a Senate hearing on March 12th.
According to Cave, the industry is dominated by “big box retailers,” with Bunnings being the primary player. She noted that although there are independent garden centers, they make up a small sector compared to the dominance of Bunnings. This monopoly raises concerns about unfair treatment towards growers and the lack of competition in the market.
One major issue highlighted by Cave is the absence of binding contracts between suppliers and retailers. She stated that non-binding supplier agreements are the norm in the sector, resulting in significant uncertainty for growers. Retailers can encourage farmers to grow a certain quantity of plants but are not obliged to purchase them. This leaves farmers at the mercy of retailers, who may decide to purchase only a fraction of what was initially agreed upon.
Cave also alleged that farmers have been pressured by big retailers to sell their products at a loss or forced to use more expensive freight services arranged by retailers. She claimed that evidence of such practices exists across all states and territories, affecting growers of all sizes.
In response to these claims, Cave suggested that large greenlife retailers be included in the Food and Grocery Code of Conduct, a voluntary code that outlines standards for suppliers, wholesalers, and retailers in the food and grocery sector. By making this code mandatory and extending it to cover the greenlife industry, Cave believes unfair business practices by retailers can be prevented.
Bunnings, however, refuted these monopoly claims. The company’s managing director, Mike Schneider, stated that Bunnings only commands less than 30 percent of the greenlife market, according to data from IBIS World 2024. He also argued that there are numerous competitors in the retail garden supply sector, including big box retailers, independent nurseries, hardware chains, and online retailers.
Furthermore, Bunnings denied allegations of mistreatment towards growers. The company emphasized that it is subject to legislation such as the Competition and Consumer Act 2010 and the Australian Consumer Law, with robust processes in place to protect the interests of suppliers. Schneider highlighted the longstanding relationships Bunnings has with thousands of suppliers and the avenues available for them to raise concerns.
Bunnings also argued against the inclusion of the greenlife sector in the Food and Grocery Code of Conduct. Due to the presence of a large number of competitors in the market, Bunnings believes that the code is unnecessary and more relevant to sectors where a few players control the market, such as supermarkets.
While the debate between GIA and Bunnings continues, it remains to be seen whether further action will be taken to regulate the garden plant industry and address concerns about market dominance and unfair practices.
