Home » ‘I thought it would kill me’: Bunnings suppliers break silence about hardware chain’s strategy

‘I thought it would kill me’: Bunnings suppliers break silence about hardware chain’s strategy

Suppliers of garden plants to Australia’s biggest hardware chain Bunnings are reporting treatment from the company allegedly so severe that the resulting stress on nursery owners has threatened marriages and left some feeling like “slaves” and “serfs”.

Bunnings, which is owned by ASX-listed conglomerate Wesfarmers, opened its first store in 1994 and today has more than 300 nationally.

Data from IBISWorld shows Wesfarmers controls 43.3 per cent of the hardware market, although the company says its plant sales share is closer to 25 per cent.

The allegations are raising questions about whether Bunnings is abusing that market power.

One current supplier, who was fearful of going public in case the company sued them, told ABC News that supplying potted plants to the company was not just unprofitable but that, in some cases, its supply terms saw them sell to the company at a loss.

After many years supplying the retailer, the grower said their small business was earning so little off their contract that the grower and his wife did not need to pay income tax and were only going to be able to retire by selling off their nursery.

“We have been virtually treated as serfs,” the nursery owner said on condition of anonymity.

“They wound our business into the dirt.”

ABC News has sighted supplier agreements with Bunnings that highlight some of the supply terms upsetting former and current growers, including “rebates” that see growers paid 15 per cent less for stock if it is sold into newly opened stores.

Potted flowers on racks waiting to be sent off to a retail nursery for sale.(ABC News: Emilia Terzon)

The documents also show that some growers are not being offered minimum guaranteed orders, which the anonymous grower said left them feeling vulnerable and fearful of raising conversations about raising prices in case orders disappeared.

“Bunnings is virtually a protection racket like the mafia,” he said.

“It’s like legalised extortion and it should not be able to operate in a country like Australia.”

Similar allegations were also aired publicly last week in a Senate inquiry, where a much bigger supplier, which produces 300 million plants a year and employs 150 workers across two sites in regional Australia, voiced concerns under parliamentary privilege.

Boomaroo Nurseries sent its last shipment of plants to Bunnings last week, as the company decided to exit its contract after 11 years.

“It’s been tiring. It’s been draining,” the company’s chief executive Peter Smith told the Senate about making that decision.

“But it’s also been a little bit liberating as well, being able to tell them no, and walk away and watch them get angry and return at us, and make threats because we’re leaving.

“And there’s not a day goes by that any of us regret that decision.”

A man with short hair wearing a navy polo and orange hi-vis vest stands in front of green plants.

Peter Smith from Boomaroo Nurseries appeared in the Senate last week.(Facebook: Boomaroo Nurseries)

Mr Smith told the Senate that Boomaroo Nurseries had “broke even at very best” off its contract with Bunnings for a decade, and that it ended up making a loss on $8.5 million in revenue.

“We were asking for price increases,” he said.

“Every time we requested a price increase, some kind of threat was made to make you feel like you’re asking for something that’s completely terrible.

“So we dropped the price discussion completely for fear of having our prices go down rather than go up.”

Mr Smith also raised concerns about the lack of guaranteed orders, and said the company spent $4.5 million building up a facility “on encouragement” from Bunnings to produce new types of plants, and then found orders dwindled or were cancelled.

“It’s heartbreaking,” he said.

“Watching a large team working tirelessly to prepare stock and then it not be taken. It’s a terrible situation.

“And it’s left me feeling drained, and like I’m insane.”

Mr Smith said Boomaroo Nurseries dealt with many “very respectful” smaller family run nurseries that bought smaller amounts of stock and in his opinion the “one real problem” in the plants retail industry was Bunnings.

“They’re trying to play us all off against one another and drive the price down.”

Mr Smith declined an interview.

Another smaller nursery owner, who has not supplied Bunnings for eight years, also told the Senate that she and her husband stopped supplying the big box retailer because the stress of it was threatening their marriage.

Karen Brock from Brocklands nursery and garden supplies

Karen Brock from Brocklands nursery and garden supplies.(ABC News: Chook Brooks)

“We felt that we were slaves. We were slaves to Bunnings,” Karen Brock told the inquiry.

“It got to the point where our marriage was in deep trouble. Our business was in deep trouble. And our future was in deep trouble.

“We have not dealt with Bunnings since 2016. And I have to admit it took four years before we could step into a store.”

Why is Bunnings in the Senate?

The testimony was aired in the Senate as part of an ongoing inquiry into supermarket pricing. While Bunnings is not a grocery retailer, it has been dragged into the inquiry because it sells plants.

Rows of multicoloured flowers undercover at a nursery.

The allegations are dividing the plant growing industry, with some still backing Bunnings.(ABC News: Emilia Terzon)

The supplier testimony aired there last week comes after lobbying from an industry group that represents some growers.

Greenlife Industry Australia (GIA) has been calling for a mandatory code to protect the growers, and has been publishing petition notices and the testimony of aggrieved former Bunnings growers online.

In one published account, a former grower raises concerns about verbal contracts, below cost pricing offers, and being forced by Bunnings into using the hardware giant’s own freight and logistics company to deliver plants and seedlings, further eroding any profits he was making. 

The campaign and Senate submissions have driven Bunnings onto the offensive.

ABC News has seen an email that Bunnings chief executive Michael Schneider sent to growers early last week, where he urges them to report “feedback directly” to Bunnings or through its anonymous whistleblower reporting system operated by consultancy firm Deloitte.

“I’ve been particularly concerned at the suggestion that some of our suppliers haven’t felt safe to raise concerns with us,” Mr Schneider wrote.

The company has also been gathering letters from growers who say they have positive relationships with the company.

A man wearing a long-sleeved business shirt holds a small pot of pink flowers surrounded by racks of flowers.

Brendan Haar from Haar’s Nursery says they’ve always had good dealings with Bunnings.(ABC News: Emilia Terzon)

The managing director of one those growers, family-owned business Haars Nursery, told ABC News they decided to publicly support Bunnings due to concerns that GIA was airing inaccurate or one-sided testimony.

“We felt that some of the accusations that GIA were making weren’t in line with the experiences that we’ve had with Bunnings,” Brendan Haars said.

“Every commitment we get from Bunnings is always in writing.

“Our experience is that Bunnings has always taken the product they’ve committed to take.

“We’ve been supplying Bunnings since their first store. It’s been a great relationship.”

A man wearing a sky blue shirt with the sleeves rolled up inspects red flowers in a nursery.

Brendan Haar from Harr’s Nursery says they’re worried the industry group for growers is putting out some inaccurate information.(ABC News: Emilia Terzon)

Bunnings has also been raising concerns that GIA is overstating the retailer’s market power in the plant and garden space and sharing inaccurate information.

The head of GIA said the industry lobby group found this “offensive”.

“We have received many, many accounts from growers of all sizes in every part of the country. It is clear that Bunnings is less than fair and reasonable in their treatment of growers and the themes we have reported are consistently reported,” Joanna Cave said.

“Growers have nothing to gain, and a great deal to lose, by criticising Bunnings.”

Bunnings has also been hosing down some of the claims being made, with its chief executive Mr Schneider saying in a statement after the Senate hearings last Thursday that some of the claims heard there were “historical” and “not aligned” to the information it had at 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,” he said.

“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, more than half of whom we’ve worked with for more than 20 years.

“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.

“Our team and I are always happy to meet with growers if there are concerns either directly with the grower or with the many industry associations across the market.”

Laura Gaspert, ethical sourcing manager, and Belinda Rakers, category manager, will front the Senate today to represent Bunnings and respond to the grower allegations.