Rose Prince: Let them eat pheasant. The great supermarket mark-up mystery

A pheasant's price is manipulated because city dwellers have no clue about its real value

Wine, Tesco and pheasants: all are having, we are told, a good year. The Sangiovese grape has reached such heightened, bursting ripeness that this year's Brunello will be as black as bramble jelly. As for Tesco - £628m profit in six months, and it's a British company. Responsible, too, for £1 of every £8 spent in all British shops. Pinch yourself, and if you are a shareholder, pour yourself a large one.

Now to the pheasant. On the same morning that Tesco announced its astonishing gains, I learned something about the pheasant that made no sense at all.

This bird is an excellent source of inexpensive meat despite the fact that it oozes an image of luxury. A gamekeeper told me that when the season gets under way I can buy from him direct a brace of oven-ready birds for £4. In the meantime I discover that the wholesale price for this bird ranges through the season from an average £1.22p down to an average of 61p, mid-glut. Supermarkets, however, have them on the shelf at an elite minimum price of £3.50 each. You sense at this point an uneasy tingle. Shareholders in Tesco will be popping corks, but consumers may not have so much to celebrate.

Tesco, as one of the big five supermarket chains, has built its success on selling cheap food and other goods. Yet here is an example of how food costs just what the retailer wants it to cost. The price of pheasant has been manipulated because your average city dweller hasn't a clue about the real value of one of these dead beasts. The notion of toffs in tweeds breeds an assumption that pheasants should cost a lot. The mark-up tinkles into the tills - and consumers are none the wiser.

It seems churlish not to cheer a British company that makes more than £600m in six months, but Tesco's success means not only that it can choose how much it pays for food, but also that it reserves the right to choose how much to charge you for it. Supermarkets that account for 80 per cent of food produced in Britain have such extraordinary clout that they can squeeze the buying price down to the point where the producer barely, and sometimes never, makes a profit. For many farmers the response to such pressure is to come up with unorthodox solutions such as paying migrant workers pittance wages to pick vegetables, or pumping chickens with added meat, protein and water.

The shoppers, needless to say, are the last to know of these practices. Tesco says it is responsible both to its shareholders and shoppers; even its trade union critics admit it is one of the best payers on the high street. What they say supermarkets are not are moral guardians of the country.

The benefits of their success are not finding their way into the wider economy. The New Economics Foundation (NEF), set up to look at alternatives to the global economy, says the success of the supermarkets is draining regional economies. Information gathered for "Ghost Town", a report by the NEF, found that the arrival of the superstores in the regions saw sales at fresh-food specialists - butchers, fishmongers, bakers and greengrocers - drop by 40 per cent between 1995 and 2000.

Added to this, the extra money spent in supermarkets tends to move out of the local economy, creating what the NEF calls the leaky bucket effect. An earlier report, commissioned by the Government's Countryside Agency, found that for every £10 spent in local stores, £25 is added to the region's economic health. Spending the same in a superstore yields just £14. Very little of the wealth that supermarkets generate stays in the communities in which they operate. Payroll for a store such as Tesco makes up just 7 per cent of its turnover. The great bulk of the company's retail profits flow from the stores back to head office and ultimately to the corporation's shareholders around the world.

Jobs also go at suppliers. In the past three months the cost of chicken production has risen by 10 per cent, while the price from the processor (who sells to the supermarket chain) has increased by only 2 per cent. Complaining gets you nowhere. Whinge about the low prices paid for food and a supplier could find himself ousted in favour of a Dutch competitor.

Three years ago the Competition Commission admonished the supermarkets for their treatment of suppliers, introducing a voluntary code of practice, but the National Farmers' Union says it unequivocally failed. It was meant to address the problem of supermarkets putting undue pressure on suppliers. The upshot was that no supplier, big or small, would be prepared to admit to being badly treated.

The union is asking the Government to set a regulatory body to audit deals between suppliers and supermarkets, with both sides keeping full accounts of transactions.

This, then, is the price we pay for the stores' greatest selling point: convenience. The very efficiency of grouping not only butchery, bakery, greengrocery and fishmongers, but also clothes, pharmacy and electrical goods under one 10,000sqm roof with free parking outside might suit us but it costs jobs. A National Retail Planning Forum study, commissioned by Boots the Chemist, estimates a neighbourhood has a net loss of about 270 jobs when a superstore arrives in the area.

At the root of all this is the great mark-up mystery, the fact that, in spite of everything we know about supermarkets, we do not know food's real worth - how the price of an egg, a piece of fish, a steak, or a cauliflower is really determined. Between us, the consumers, and the hard-pressed suppliers, there is a missing chunk of information: how the supermarkets determine what we pay for our food.

Those who watch the supermarkets, such as the NEF, warn that there will be a price to pay. Once competition has been completely squeezed out, it says, they could gradually push prices right up to please their shareholders.

There's nothing left for it. For those who do not want to witness this becoming a reality, a little poaching may be in order. Treat yourself to a pheasant this weekend.