Coles unleashed its latest weapon against rival Woolworths on Monday, announcing a discount of 50 per cent on some fresh produce lines.

Fresh food producers and outlets agree the discounts will be unsustainable in the long term.

Harcourt and District Fruit Growers Association president Trevor Peeler was concerned that even growers who sold to smaller fresh food outlets would be affected.

He said small fruiterers would have to compete with the slashed prices resulting in lower profit for growers who either supply to supermarkets or smaller fresh food outlets.

“Our prices are already very low in terms of prices. After 10 years of drought we were hoping that the prices would have snuck up but the only thing that has snuck up is our cost,” Mr Peeler said.

“Coles says it’s going to help our industry, but it’s actually going to be unsustainable for growers.

“There’s no doubt this will be the final straw for many growers. For some in Harcourt, certainly I can see this as the final straw that will cause them to shut down.”

Norm Quin, owner of Quin’s Bluebird fruit shop in Bendigo, recognised the adverse effects ahead for growers but remained positive customers would continue to take their business to the small green grocers.

“I’m not worried. We’ve got a lot of customers who like good quality produce,” Mr Quin said.

Castlemaine Fruit Supplies owner Jeff Halacas believed most smaller fresh food outlets would be hit hard by new prices.

“If the costs keep going up and the fresh food prices keep coming down, how are they going to afford to keep going?,” he said.

Mr Halacas did say, however, that he could understand why customers would shop at Coles, regardless of the effects on the industry.