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The truth behind the avocado shortage: growers made ‘innocent mistake’

Avocadoes in crates at markets image www.sunblestproducts.com

What’s behind the avocado price increase?

Australia’s summer avocado supply shortage is largely the result of market manipulation to boost sales before Christmas, says Antony Allen, former chief executive of Avocados Australia.

For weeks the avocado industry has blamed rain and bushfires for Australia’s summer shortage, which has seen wholesale prices double, retail prices spike to $7 per fruit, and avocado rationing.

But Fairfax Media can reveal the supply crisis was the industry’s own doing; a result of market manipulation aimed to boost sales in the lead up to Christmas.

“I think it was an innocent mistake,” said Antony Allen, former chief executive of Avocados Australia and president of the International Avocado Society. “It was done with the best intentions. It’s a misunderstanding of how the markets work, and now we’re in uncharted territory.”

avocado & vegemite sandwich image www.foodpasions.net

Vegemite and avocado on toast is now considerably more expensive.

In the belief that demand for avocados would drop after Christmas, some Western Australian growers – who produce most of Australia’s summer supply – decided to shift more of their fruit to the pre-Christmas period.

“Avocados are a little unusual in that they won’t ripen until they’re picked. You have some flexibility,” Mr Allen said.

Producers kept wholesale prices artificially low at about $45 for a 5.5kg tray, leading to reasonable retail prices and very healthy sales, he said.

avocado limits sign image www.sunblestproducts.com

Brisbane shop posts sign to warn consumers. Photo: The Avolution

“They were artificially keeping it lower. And that’s great for that period, but doing that meant we used up more avocado before Christmas and therefore had less after Christmas,” he said.

“Some of the sheds out of WA implemented that decision. It was something that seemed very strange to the rest of the industry.”

That decision has led to a dearth of avocados in January, massive price jumps, and consumer outrage. Rainy weather, Mr Allen said, had exacerbated the shortage by delaying harvest.

avocado limits by store image www.sunblestproducts.com

Avocado limit imposed in Brisbane store. Photo: Kim Stephens

Australians have more than doubled their yearly intake of the fruit to 3.2kg in the past decade, according to Avocados Australia.

John Tyas​, chief executive of peak industry body Avocados Australia, said he was not aware of the market manipulation by some WA growers and maintained the shortage was primarily caused by bad weather and high demand.

“I do know there have been big volumes coming through the system since early spring. So that continued right into summer, and basically supply has been provided to meet demand in that time,” he said.

avocadoes growing on tree image www.sunblestproducts.com

“A lot of the big volumes go through the major chains anyway and whatever happens there is really dictated by their marketing strategies. But I’m not aware of any of that.”

Chris Cope from the Sydney Market Reporting Service said avocado prices in the past month have gone through the roof and now “worth a bomb”.

He said some wholesale vendors were cheekily inflating prices to dissuade overly enthusiastic buyers who were ready to buy pallets worth. He said they were trying to protect relationships with their regular customers.

Avolution chief executive Antony Allen.Avolution chief executive Antony Allen. Photo: The Avolution

“It’s gone a little bit crazy. Even the merchants say it’s gotten too much,” he said.

Melbourne Market wholesaler Greg Scopelleti​ said the price of a box of up to 23 avocados had hit as high as $120.

At the cheapest, when avocados are plentiful, they can be as little as $20 a tray. A regular price is $30 to $40.
John Tyas from Avocados Australia

avocado australia john tyas image www.sunblestproducts.com

John Tyas from Avocados Australia Photo: Avocados Australia

“It hasn’t happened like this for 20 years. It’s finishing as of this week … I’ve sold my last box for the season,” said Mr Scopelleti, whose family owns an avocado farm in the Sunraysia region of Victoria.

“Avocados used to be a bit of luxury. Now they have become a staple, people substitute it for butter, have it on toast, salads.”

Despite high retail prices, some shops are enforcing purchase limits.

The Gabba Fruit Market in Woolloongabba in Brisbane has imposed a limit of six avocados per person at $5.49 each.

Mr Allen said he saw an independent greengrocer in Indooroopilly, also a Brisbane suburb, with a harsher restriction of three per customer.

Harris Farms is selling Australian-grown avocados at $6.99 each, while Coles has lifted prices in the past week by a third and selling them at $5.50.

Mr Allen the food service industry was being hit particularly hard, especially sushi and Mexican restaurants where avocado is a staple.

avocadoes in bulk boxes image www.sunblestproducts.com

Stephanie Raco, who runs the Sydney food truck Cantina Movil, has protected herself from price hikes by using frozen avocados. She made the decision four years ago.

“We have been Mexican restaurateurs for a long time – for a decade and a half – and we were used to the price fluctuations and the variations in their quality, so we have learnt to outsmart the system,” she said.

Industry players believe the supply issues will ease around March, as fruit from Queensland enters the supply chain.

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Henry Sapiecha

January 25th, 2016
Topic: Avocadoes, PRICES Tags: , , ,

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