Local grocer in banana war on supermarkets
Monday 02 November 2009
A two-store grocer in north London will today take a stand against the UK’s biggest supermarkets which are waging a price war on bananas that threatens to do lasting damage to plantation workers in developing countries.
Andrew Thornton, who owns two Budgens in the capital, has vowed to give his profits on bananas in November to Costa Rican workers alongside a campaign, Play Fair, Trade Fair.
His move comes after Aldi, the discounter, drove down the price of a bunch of bananas to an all time low of 37p a kilo last month and kept it there until last week. Asda and Morrisons went down to as low as 38p and 39p, respectively, although all three grocers have now raised their prices. By volume, grocers sell more bananas than any other food item in the weekly shopping basket. The average price of a kilo of bananas has fallen almost two thirds since 2002.
Mr Thornton said: “We are doing this because the situation is ridiculous with prices spiralling onward and downward and no one is prepared to stand up to Asda. I don’t think that consumers really understand the impact of buying cheap bananas. At the moment retailers say they are absorbing the price reductions, but ultimately the price cuts get passed down the chain to the workers in Costa Rica at the end.” He said that workers in Costa Rica have to work 15 hours, six days a week to earn a minimum weekly wage in the country – which is equal to 33p an hour.
The profits made on bananas by Mr Thorntons’ two stores, in Crouch End and Belsize Park, will be channelled by Banana Link, the non-government organisation, to a Costa Rican workers’ organisation, which is struggling to get involved in Fairtrade.
Alistair Smith, the international co-ordinator at Banana Link, said: “The way that Asda and Aldi have led the dramatic banana price wars downward to historically low levels over the past six weeks is irresponsible. In our view, the claims that they are taking the hit at the moment are totally disingenuous because when it comes to the next round of price negotiations with suppliers you know the first question will be: ‘How much sacrifice can you make’?”
Banana Link claims that Wal-Mart, the parent of Asda, has also reduced its banana prices recently. Wal-Mart did not return calls and Asda said that both companies set their prices separately. Mr Smith said the Wal-Mart strategy on bananas is a “potential worry because it could lead to all the value being stripped out from the world banana market, which for all retailers could be suicidal”.
An Asda spokesman said: “We were very clear that we have a certain amount of money to invest that is funded by us not workers. This is absolutely not pushed down to the growers.”
An Aldi spokesman said: “Aldi’s pricing policy is to follow the competitive market environment. We are currently therefore retailing our bananas at £0.49 per kilo. It is the clear policy of Aldi to have a long-term positive relationship with our suppliers and therefore we will not allow market turbulence to have any impact on the growers of bananas”.
Last month (October), Tesco maintained the price of a kilo of loose bananas at 50p and Sainsbury’s kept its price at 46p a kilo. However, in early October Tesco did lower the price of its value pack of bananas to 35p, although it raised them to 47p on 28 October.
Waitrose, which only sells Fairtrade bananas, has warned of the consequences of its rivals driving down the price of bananas.
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