Supermarket Price Wars Hurting Third World Producers

The UK Government is being urged to launch an investigation into "price wars" that are holding down…

The UK Government is being urged to launch an investigation into "price wars" that are holding down the price of bananas and could force farmers in developing countries out of business.

Over the past 10 years, the price of bananas in the UK has halved, while the cost of production to the farmers has almost doubled. Supermarkets in the UK now buy and sell bananas so cheaply that many of the farmers and workers who grow them are being trapped in poverty.

That's according to research commissioned by the Fairtrade Foundation, which showed that people in the UK typically pay 11p for a loose banana compared with 18p a decade ago, while a loose apple grown in the UK now costs 20p.

The report, entitled 'Britain's Bruising Banana Wars' further exposes the real impact British supermarket price wars are having on banana farmers and workers and their families. The resulting drop in export prices for bananas in producing countries means an ever-tightening squeeze on what producers earn for their bananas. This, combined with escalating production and living costs, means many farmers and workers’ standards of living have progressively worsened in the past decade.

“Small farmers and plantation workers are the collateral damage in supermarket price wars. The poorest people are bearing the cost of our cheap bananas and they have to work harder and harder as what they earn is worth less and less in their communities. As a result, a product that is worth billions of pounds in global trade relies on poverty-level income for the people who grow it,” said Foundation chief executive Michael Gidney.

Mr Gidney said in a letter to Business Secretary Vince Cable the price of a kilo of loose bananas had fallen from £1.08 in 2002 to 68p.

He added: "The pressure on price means no one in the supply chain - retailers, banana companies or growers - are able to adequately invest in improving the sustainability of the banana industry."