Taking on Woolworths

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Considered one of Australia's toughest rugby league players, Mal Meninga is facing up to one of his toughest battles - taking on Woolworths.

He was one of the toughest rugby league players to take the field, playing 45 tests for Australia and 35 Origin games for Queensland. Mal Meninga is also a great tactician winning a record 4 State of Origin Series in a row as coach - but he may not win what could prove to be his ultimate battle.

Gary Grienke teamed up with the legendary Mal Meninga 12 months ago and opened three Meninga Fresh Fruit and Vegetable shops. One of the stores was outside a Woolworths at Taigum on Brisbane's North side, and it's here they've run into some very tough opposition.

"They particularly attacked us on all the key elements of a fruit and vegetable shop and they are tomatoes, potatoes, lettuce and those sort of lines, bananas," Grienke said.

It's a similar story to the one told by independent fruiterer Peter Chahoub two years ago. Peter bravely stood alone as part of a Today Tonight investigation into predatory pricing - an investigation that showed Woolworths would stop at nothing to win a fruit and vege war, selling produce below cost price if necessary.

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Just days after the ACCC introduced new laws to curb predator pricing, one Woolworths store slashed the nationally advertised special price on bananas from a $1.97 to just 30 cents.

Peter Chahoub no longer runs his fruit shop: he went under trying to fight Woolworths.

Two years ago, a Woolworths on Brisbane's Southside was one of the cheapest for fruit and vegetables. Today it's one of the most expensive.

At around the same time, Thierry Blondeau was fighting off Woolworths at two of his fruit shops - one in Noosa on the Sunshine Coast and one on Brisbane North side.

"You had all the Woollies' management there standing in front of the shop, having a look and walking through the shop. Well, if that's not intimidation, what is?"

The result was the same - just like Peter, Thierry went to the wall.

Gary Grienke and Mal Meninga have taken over Thierry's shop at Taigum hoping they can weather the storm using Meninga's profile. Judging by Woolworth's prices, it looks like they're up for a tough fight.

Rockmelons at Meninga's are $2.99 - next door they're $2 dollars cheaper at 98 cents. At two nearby Woolworths (where there is no fruit shop), Rockmelons are $3.42.

Pumpkins at Meninga's cost $1.99 a kilo - Woolworths next door are charging 75 cents. At the two other Woolworths, shoppers are asked to pay $2.98.

It's the same again on Pak Choy. Meninga's is selling them for $1.99, the Woolworths store next door has them for 98cents (unless you shop at the two with no competition, where they're $1.98).

Woolworths refutes any claim they engage in predatory pricing.

When quizzed on the price difference for mangoes in their stores, Today Tonight was told the produce may have come from different suppliers. Today Tonight discovered they were from the same farm. It was also suggested the rockmelons may have been of varied quality and therefore set at different prices for different stores. Today Tonight was told the pak choy was part of a special buy limited to 80 stores.

Woolworths insist the proximity of Meninga's fruit store was not related to the presence of the discounted produce and in no way did the discounted items represent predatory pricing.

For Woolworths' Clare Buchanan, it is just normal fluctuations of supply and demand and nothing underhanded.

"The ACCC inquiry last year did a very thorough and very rigorous investigation into the whole supermarket sector and it found that the sector was competitive and it's getting even more competitive," she said.

Independent Senator Nick Xenophon disagrees.

"The sheer size of Coles and Woolworths distorts the grocery market, its anti-competitive, it means consumers end up paying more than they need to because Coles and Woolies have such a dominant role in the market and that squeezes out competition."

Senator Xenophon, along with Senator Barnaby Joyce, has a plan in the form of a private members bill.

"Put simply what the Blacktown Amendment says to a big chain is that if you discount there you need to discount everywhere - that way it stops the big chains from picking on the independents and pricing them out of the market," Senator Xenophon said.