Industry leaders have labelled the new campaign, announced by the supermarket giant on Monday, as the fruit and vegetable version of the recent milk price wars.

But Rob Fattore from Tony’s Farm Produce, who supplies indirectly to the big two, said it would help “clear the excess” in the market, thereby increasing demand.

“I don’t think it will affect the growers negatively,” he said.

“Unlike the milk price wars, there’s no fixed price for fruit and vegetables, it’s a supply and demand industry.

“By lowering their prices, more consumers will buy the product and help reduce the excess that’s currently in the market. Once the market’s been cleared out demand will go up again.

“If the demand is there then farmers aren’t going to sell their produce for nothing – if the demand is stronger, the price for growers is stronger. I think it’s going to help the market.”

Mr Fattore said growers had been outraged by the mark-ups the supermarkets put on their products for years and this campaign was a win for local farmers.

“For years farmers have been walking into supermarkets seeing their produce at $4 a kilo when they get 40 cents for it,” he said.

“They’ve been calling for this for a long time and Woolworths and Coles are finally seeing that and how consumers will buy more with the prices dropped.”

But local farmer and campaigner John Ward said growers should be wary about the long-term effects of the price drop.

“They said that farmers wouldn’t be affected when they dropped the price of milk but since they started that campaign nearly 30 per cent of farmers in Queensland have gone out of business,” he said.

“The power of these companies is phenomenonal and they won’t want to lose their profit margin, so they’ll just import the food at a price that’s well below our production costs.

It’ll end up making our industry in Australia redundant.”

Coles spokesman Jon Church said the company had invested millions in the campaign but had worked with suppliers on an agreed price.

“By giving growers a commitment that we will take as much of their crops as we possibly can, we have provided them certainty that they have a market for their product,’’ he said.

Woolworths would not comment on whether it would be dropping its fresh produce prices as well.