Big box update: Growers and supermarket code

Plant lobby accuses Bunnings of "stranglehold" on greenlife category

Woolworths and GIA have formed an unlikely alliance in calling for Bunnings to come under the supermarket code

Bunnings managing director Mike Schneider has rejected claims made by the chief executive of plant industry lobby group Greenlife Industry Australia (GIA), Joanna Cave that the hardware/home improvement retailer has 70 per cent market share of greenlife products.

He recently told The Australian Financial Review (AFR) the retail horticulture sections of the 310 Bunnings outlets in Australia selling seedlings, native grasses, flowers and shrubs had an overall market share of about 25 per cent.

In GIA's submission to the Senate Select Committee's Inquiry into Supermarket Prices, Ms Cave said its figures came from extensive surveys with growers, carried out over the past five years.

We think the growers are best placed to know. We're very confident that we're right.

However, Mr Schneider said there were between 1000 and 1100 growers of seedlings and plants around Australia with diverse avenues to market, and Bunnings only dealt with about 250 of those.


The commercial gardening and nursery sector has publicly expressed - for the first time through GIA - its concerns about Bunnings' market power and how it treats growers.

The nursery industry has been valued at over $2 billion at the retail level and GIA represents businesses that grow seedlings, plants and trees that are sold to gardeners. It employs more than 25,000 people. GIA said by volume of units sold in Bunnings' stores, plants were second only to tins of paint.

In its submission, GIA said Bunnings' massive market share allowed it to dictate prices and supply of plants. The submission said:

Whilst growers of nursery products do supply plants to many supermarkets, our bigger concern is with the supply of plants to what are commonly described as big box stores.
Bunnings is by far the biggest of these, maintaining a national market share of 70 per cent, rising to over 80 per cent in some regions and towns.

Ms Cave said:

We've got lots of examples where we feel Bunnings is abusing their dominance of the marketplace. Growers have shared their stories with us in complete confidence because they are genuinely scared of retribution.

Ms Cave said she had spoken to at least 200 growers in the lead up to the inquiry, and some were being encouraged to plant up to 10,000 seedlings but given a contract for only a single plant.

And they might ask several of the growers in the region to also plant 10,000. But they're under no obligation to take any from anybody. Of course, that's a perfect example of asymmetry of information, because the big-box retailer has all the information on who is growing, the numbers they've been encouraged to grow and the prices that they're requesting. They can pick and choose. They can take 8000 or 5000 or none. It's up to them.

Ms Cave said grower appeals for price increases were routinely rejected after lengthy reviews while retailers would raise costs of nursery products overnight. She also said fear of retribution or being punished for raising complaints against Bunnings was "the biggest issue" growers expressed to her.

It's been the No. 1 preoccupation for growers.


Tasmania-based Brocklands Nursery owner Karen Brock supplied native trees, grafted and standard roses, herbs and perennial plants to Bunnings from 2003 to 2016.

Appearing before the senate inquiry, she said the relationship worked "incredibly well", until increased demand to supply plants for merchandise stands in store "with no contract or even an indication of what numbers they were looking at" placed her business under pressure. In The Weekly Times, she said:

When you've got merchandise space, you've got this Holy Grail of space, it gives you confidence to put stock on the ground, but not off an order. We were growing (plants) two years out, this is a long-term investment you're spending now to get a sale out of in two years. You get the confidence, and you get sucked in, you start investing and borrowing money because you have to put all this stock down.

She said there was no supply contact, and was subjected to intimidation when complaints were raised with Bunnings, citing one example where an entire range of plants were cancelled.

They would not give decent orders, they would not confirm orders, they would not give us any forward planning.

When Ms Brock raised concerns with Bunnings, she said the barcode for her product was cancelled. She said Bunnings' practices resulted in low prices for her business and order sizes in some years collapsing without any warning, as the retailer switched between its various suppliers in an apparent "divide and conquer" strategy.

Ms Brock said troubles with the giant retailer escalated in 2014-2015, when Bunnings opened new stores in Burnie, Launceston and Glenorchy. She told the senate committee:

Because we're growing stock two or three years in advance, we needed to know what were their plans so that we could grow stock.

Bunnings refused to sign trading terms or contracts detailing the number of plants they would buy from her over time. It also refused to adhere to minimum plant order sizes, forcing her to incur losses delivering small orders to Bunnings stores state wide. Ms Brock said:

We were travelling to Hobart and back ... for a $78 order, or a $48 order. We tried to bring in a $300 minimum order but that was rejected.

Ms Brock said the unfair lack of transparency on its ordering schedule was rife in Bunnings.

We had these huge pressures put on suppliers, they promised the world, and then those promises weren't delivered.

Her business was left with mountains of unsold stock as a result. She said:

I don't think there's anything worse than seeing your work of two to three years sitting on the tip. I felt that we were slaves, we were slaves to Bunnings.
We were a mouse running around the hamster wheel and no matter how fast you spun that wheel, you could not ever achieve the goal of making somebody happy in that environment.

Nick Powell is a nursery grower near Stanmore in Queensland. He is aged in his 70s and faced health issues, including a battle with leukaemia. He has vented his frustrations at dealing with Bunnings Warehouse in the past.

Growing a mixture of indoor foliage plants and landscaping plants, Mr Powell said he felt he was a very good supplier to Bunnings, but grew increasingly frustrated with a lack of certainty around orders. Bunnings was its largest customer, with other minor customers. In the Weekly Times, he said:

The issue was we'd try and get allocations for stock we knew would be ready at a certain time, that was the hard part.

He said there were no supply contracts at all between his nursery and Bunnings. In order to work with the uncertainty, Mr Powell would invest in bigger pots to replant stock in "to keep growing it, and hope to sell it as larger stock items".

That was one of the only ways we could cope with not being able to get our stock into store.

Tim Drewitt is a nursery plant grower, selling to Bunnings through his Silvan-based farm, Drewitt's Bulbs, in Victoria. He said he has supplied product to Bunnings since late 2018, and has had a positive relationship with the company, contrary to some stories being told by other suppliers. In The Weekly Times he said:

We're purely a Mum and Dad business, I have a young family. I'm a little frustrated with GIA. I have reached out to them a couple of times asking for support in various avenues, and they tend not to respond.
I'm sure there are suppliers who have had issues, but I have not experienced that. We employ up to 30 employees, and especially during COVID, the support and patience shown by Bunnings was very accommodating.

Bunnings' response

Mr Schneider said he was "concerned" to hear the accounts from some of his former suppliers. In the Examiner, he said:

Some of the claims made were new to us, some quite historical, and others are not aligned to the information we have to hand. They're absolutely at odds with the way we believe we do business and we look forward to responding to these more formally in due course.
Assertions that we do not have contracts or that our team refused to make commitments or agree to price increases are simply not true. We're confident the two accounts don't reflect the views of the vast majority of our around 220 greenlife suppliers. However, we know we don't always get it right and if we let a supplier down, we act as quickly as we can to remedy it.

He said he invited suppliers who were unhappy with their dealings with Bunnings to reach out and meet him, with GIA as an intermediary if they wished. In the Sydney Morning Herald, Mr Schneider said:

I'm always going to be sad to hear about situations where people say we haven't done the right thing. Me personally, I want to put it right.
If someone's done the wrong thing in my team, we've got very strong internal processes in our own code of conduct that we hold our team accountable to. I'm not saying we're perfect, I'm not saying 'nothing to see here, move on'. There could be truth in what [they] said.

An independent whistleblower resource managed through Deloitte is also available to suppliers, Mr Schneider said.

We have previously asked the GIA for their assistance in connecting growers with us if there are concerns so we can assist and support them.
We have reached out to all current greenlife suppliers and encourage anyone that has feedback or an issue they'd like to discuss to contact us directly so we can investigate.

Mr Schneider said the business worked hard "to build longstanding, win-win partnerships" with plant suppliers. He told the ABC:

We have robust processes in place, including as part of our trading agreements, to ensure those relationships are fair and transparent.
Many of our supplier relationships span a number of decades and generations, and over the years they have engaged our team on ways to partner, grow and collaborate to support their businesses.

Most recently, Bunnings category manager Belinda Raskers told the parliamentary inquiry it was in the best interest of the company to maintain its relationships with producers and she was shocked at previous evidence from plant suppliers. She said:

We rely purely on our suppliers over supply, and having not really strong relationships with our suppliers is of no commercial benefit for us. We have to have really long-term, viable supplier relations here.

Supermarket code

Coles and Woolworths have signed on to plans to make the supermarket code of conduct mandatory, following a review led by economist and former Labor trade minister Dr Craig Emerson. The interim report - which is being released for feedback - recommends the code "be made mandatory and apply to all supermarkets with annual revenues exceeding $5 billion, which at present are Coles, Woolworths and Aldi and [the] wholesaler Metcash".

The report calls for the code to be strengthened to better protect suppliers, including by outlining new protections against retribution for complaints.

Woolworths and GIA have both called for Bunnings to come under the code, with the supermarket arguing that the hardware retailer is now a competitor in certain grocery categories and the association accusing Bunnings of abusing its market power in the plant retail sector.

However, Mr Schneider said broadening out the code would mean it becomes a "catch-all" that is "not going to service everyone".

It's a supermarket code ... Bunnings is just not a supermarket. We are simply not a grocery retailer or a food retailer.

Mr Schneider said that the code should be assessed through an "industry lens" rather than by product, pointing out that supermarkets might, from time to time, sell power tools.

Businesses will dabble in adjacent categories, either periodically or build those out, but that doesn't make us a supermarket, and that's a fundamental difference.

The Food and Grocery Code of Conduct regulates how supermarkets and their suppliers do business. While it includes plants and flowers in its definition of groceries, the voluntary code is only signed by the major supermarkets.

Ms Cave said growers who supplied Bunnings and other stores like Mitre 10 and IKEA need to be protected from unfair trading practices. She said that could be achieved if the government included them in the Food and Grocery Code of Conduct and made the code mandatory.

Growers really feel that Bunnings has all the power in the relationship. [Bunnings] sets the price, control supply, there is an absence of proper legally enforceable contracts - all kinds of practices that would be in breach of the code, were Bunnings covered by it.
If everything they are doing is above board they have nothing to fear - but it will certainly be a reassuring gesture to their suppliers, who are on their knees.

Ms Cave argued that the big box retailer had more in common with major supermarkets than local garden centres.

It seems ludicrous that Bunnings would sit outside the code and not be subject to any of the rules.

In the AFR, Mr Schneider referred to the vast products purchased by shoppers from Bunnings as "discretionary spend" meaning they wanted to buy them, not because they were a staple of life like in food sold by supermarkets.

As a result, it would seem unfair to try to apply a "universal" code of conduct on retail businesses which had vastly different characteristics. He said:

There's more differences than there are commonalities.

The Senate Select Committee on Supermarket Prices will hand down its report in May, and the Australian Competition and Consumer Commission is conducting a separate inquiry into supermarket pricing, due to report in February 2025.

  • Sources: Australian Financial Review, Australian Broadcasting Corporation, The Australian, The Guardian, Canberra Times, The Examiner, Weekly Times and Sydney Morning Herald
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