SMALL businesses must do their research before they team up or sign contracts with chain stores, according to Central West Business Enterprise Centre executive officer Bruce Buchanan.
His warning comes after supermarket giant Woolworths announced this week it would source fruit for its Select brand from Australia.
Mr Buchanan said it was a good sign that conglomerates were recognising the local industry but the relationship must be “mutually respectful”.
He said one of the biggest issues with farmers selling product to large companies is that, at times, the farmer will not get paid for 120 days.
“Companies sell the product and keep it in an interest account so they can make money off it,” he said.
“Small farmers usually can’t wait that long, they need the cash flow.”
Mr Buchanan said the excuse for not buying locally was that it was too expensive, however, that was not the case for all products and people should be encouraged to shop around.
“If you do not support local businesses then one day they simply won’t be there,” he said.
Large corporations can afford to buy in bulk, thus getting a discount they can pass on to consumers, however, without community support, small businesses will never be able to gain the same buying power, he said.
“Everybody is doing it tough at the moment, that is the general impression we’re getting from everyone,” he said.