If you are finding it tough paying the high prices for fresh food right now, spare a thought for the farmers supplying them.  

Supermarket suppliers are often locked in to contracts with the major grocery stores, and mostly do not have the upper hand on negotiating price rises. 

Supermarket giant Coles said it has received five times the usual number of pricing increase appeals from suppliers compared to the same time last year.

While the company has acknowledged that suppliers' costs went up during the pandemic; and that energy, labour, shipping and logistics have ballooned again this year due to the war in Ukraine, payment to farmers has mostly remained fixed.

The company has forecast an "unprecedented round of pricing increase appeals over the next 12 months from the nation's food and grocery manufacturers" and said it would review the way it dealt with those requests.

But in what is expected to add tension to the relationship, farmers are being asked to provide evidence and breakdowns of those higher costs to justify any potential increase. 

In a statement, Coles said, "A major focus of the review is how suppliers will prove to Coles the size and scope of their own cost increases."

Price freezes

Jan Harwood from Margaret River Free Range Eggs is one of those struggling with rising production costs. 

"Our packaging has gone up 30 per cent in 12 months, [while] the hatchery has just put up their prices by 20 per cent and that's really going to hurt us," she said.

Ms Harwood said egg prices in the United States went up 50 per cent last year and she think Australia should follow suit.

She was also worried about the impact of supermarket chain Woolworths' "price freeze" campaign on suppliers.

Eggs, oats and dairy products are all on the list of more than 200 home-brand goods that have their prices "frozen".

"They're already walking a very thin line in terms of profits."

Regulator to survey every supplier

Independent reviewer of the Food and Grocery Code Chris Leptos said he was watching the major supermarkets closely. 

"I plan to survey 100 per cent of the suppliers to Aldi, Coles, Metcash and Woolworths in September, and I expect to see more positive feedback from the suppliers than I received last year," Mr Leptos said.

In his last survey, 16 per cent of respondents claimed their wholesaler or retailer had acted unreasonably at times, and 30 per cent said they did not complain about their contracts for fear of reprisal from the supermarkets. 

Mr Leptos met with the major supermarkets in May to explain that the complaints process in the Code was not fit for purpose and a "less formal and more streamlined complaints process" was necessary.

Woolworths has appointed employment lawyer Helen McKenzie as an arbiter to watch over their dealings with suppliers, while Coles has appointed former Victorian premier Jeff Kennett to do the same.

Mr Leptos said he would meet with the arbiters in August to discuss further improvements to the Code.