Thargomindah Foodworks owners ask why they bothered to rebuild

A number of them lost access to the subsidy in April, tripling their freight charges, and others are staring down the barrel of a similar loss come the end of June.

In Thargomindah, where the community is watching its new grocery store rising from the ashes of the October 2022 fire, the business's owners are questioning whether they should even have bothered rebuilding.

According to the Australian United Retailers submission to the Supermarket Pricing Select Committee's report into supermarket pricing, which is where the cuts were revealed, if the regional freight transport service contract were to cease, the projected increase in freight costs to the far south west community is 351pc, from $83.95 to $294.51 per unit.

Donna Humphris said her Thargomindah Foodworks business would go from paying $3.50 in freight for a 15 litre bottle of water to paying about $8.50 in freight.

"No-one wants to talk about softdrink but even a carton of Coke would go from around $2 a carton to $5.30," she said.

"We'd have to pass it on.

Bonnie Challis, who is the operations manager for the Western Downs Foodworks cooperative that covers Dalby, Tara and Millmerran, said she noticed the change in the latest bill from Metcash, the wholesale distribution and marketing company that supplies the independent, family-owned business sector.

"We normally pay $60.11 a pallet but it went up to $180," she said. "I called Metcash to say it was a mistake, we were subsidised to June, but they said TMR only picked 50pc of the stores to continue that to - we were never told that."

Ms Challis it wasn't worth their while to have the goods delivered independently as it would mean a 'depot drop' rather than to the door, thanks to arrangements with Metcash, which would then cost them to collect and take to the stores.

"We're going to have to look at cutting our expenses, maybe our wages," she said. "We already have Coles, Woolies and Aldi in town in Dalby - how do we compete with them, without this subsidy."

The group has already pivoted to deal with the arrival of large chains by offering pre-packed meals, cooking roast meals, doing catering and offering online shopping, and Ms Challis said they would keep on going with that, hoping customers would stay loyal.

"The last thing we want to do in a cost of living crisis is cut wages," she said.

At Thargomindah, Donna Humphris was adamant that they were going to rebuild their supermarket, even as they were watching it burn at 3.30am.

"We'd sold our motel three days before and we'd had that 22 years - we'd had the shop 27 years - but I realised we weren't near ready to retire," she said.

They contacted Col Maher, the Charleville builder who'd drafted up the plans for their home nine years earlier, and Foodworks assisted with the pricing for contents within six weeks of the fire that razed their business.

"They've worked with us, you've got no idea, (they're)just wonderful," she said.

It took the couple seven months to receive insurance payout covering building and contents, plus business interruption, as they were still paying their staff wages, but have been able to invest in state of the art refrigeration systems this time around.

In the meantime, with the nearest shops 200 kilometres away at either Cunnamulla or Quilpie, the roadhouse in Thargomindah stepped in and began stocking grocery items for the community.

"They've done really well, all things considering, for the town," Ms Humphris said.

She said the cause of the fire had likely been one of their suppliers' fridges.

The state manager for Foodworks Queensland, Wayne Mason, in his submission to the supermarket pricing inquiry, said the Foodworks stores being impacted are family and small businesses-owned stores and they "cannot absorb this cost and they will be forced to pass this cost onto customers".

"This will result in a dramatic increase to the cost of food and the cost of living," he said.

"Communities impacted across Queensland include Dirranbandi, Goondiwindi, Killarney, Millmerran, Mitchell, Quilpie, Tambo, Tara, Texas, Dalby, Clifton, Longreach, St George, and Warwick may also be impacted by any ceasing of the DTMR Regional Freight Transport Service Contract.

"Any increase in transport costs will need to be directly passed on to consumers in rural and remote Queensland, (and) this will have the direct effect of increasing prices.

"Small independent operators do not have the economies of scale that large corporate supermarkets have.

"Basic commodities including but not limited to fresh food, produce and foodstuffs will increase in price.

"It is our strong view that we (city folk) need to support our cousins in the bush, on the farms and in remote communities or we will make working the land unbearable and is economically counter-intuitive."

Saying that independent retailers in rural and remote Queensland were a critical part of the state's economy and a major provider of employment, Mr Mason said freight subsidies needed to be increased not deceased to cover increasing manufacturing and distribution costs.

Warrego MP Ann Leahy has called on the government to reinstate the full regional freight subsidy post June 30 to all communities it is currently extended to, and to reinstate the subsidy to those who have been cut in May 2021 and April 2024.