“The question really is who will end up paying for these discounts in this latest price war?” Mr Battistel said.

“Either Coles is charging its customers 50 per cent too much for fresh fruit and vegies, or these discounts will be cross subsidised by large margins on other products,” he said.

Mr Battistel said citrus growers were already having to sell produce at record low prices.

“Some of our growers are already selling at a loss – it’s a very hard time for our growers especially with the lack of export opportunities due to the high Australian dollar,”?he said.

He said the announcement would be a huge concern for many small fruit and vegetable stores across the country that simply could not compete with the devastating power of Australia’s two massive supermarket chains.

“Coles and Woolworths entry into selling fuel killed many small independent service stations and I think that’s what we’ll see here with small family owned fruit and veg outlets,” he said.

“That would be a very bad outcome.

“At the end of the day we lose even more competition, the supermarkets get bigger and more powerful and farmers have fewer options for selling their produce,”?he said.

Mr Battistel said ultimately the big supermarkets should put more effort into supporting Australian farmers by offering fair prices and promoting 100 per cent Australian produce over inferior imports rather than trying to beat each other up in the chase for profits.