Fairtrade groups have attacked UK supermarkets over a round of banana price cuts which, fairtrade advocates say, will put pressure on banana producers.
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The price war was triggered by the recent announcement from Wal-Mart’s Asda that it is reducing the price of bananas to GBP0.68 per kilogram. The move was swiftly followed by the UK’s largest supermarket Tesco.
According to the Fairtrade Foundation, regardless of whether supermarkets take the margin hit in the short term, the move to cut basic banana prices will inevitably put pressure on suppliers down the chain.
“Over recent years, falling banana prices have resulted in severe hardship for the producers involved, forcing smaller farmers out of the market and undermining efforts to improve environmental sustainability and working conditions on larger plantations,” the Foundation said.
In 2006, banana prices were cut to GBP0.64 per kilogram. However, according to TNS data volume sales fell by 7.9% following the move.
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By GlobalData“The Fairtrade Foundation is disappointed that consumers are being misled into assuming that 68p per kg is a sustainable price, when that is clearly not the case, and that this move opens up a price differential between conventional bananas and Fairtrade certified bananas (as well as organic certified fruit) that regrettably creates more confusion amongst shoppers on the pricing issue,” the Foundation added.
