Food producers and politicians in the Caribbean predict “dire consequences” if US retailer Wal-Mart is successful in its attempt to buy UK supermarket operator Safeway.
The prime minister of St Vincent and the Grenadines, Ralph Gonsalves, has written to UK premier Tony Blair and the UK Office of Fair Trading (OFT) to complain about Wal-Mart’s involvement in the banana price war, which has been exacerbated since it acquired Asda in the UK in 1999.
“What they [Wal-Mart] are seeking to do is to drive everyone out of the market and then to raise the price. The people who supply Wal-Mart are paying people starvation wages in Central America and Latin America, in conditions that no civilised country would accept,” Gonsalves told The Sunday Times.
Eight months ago Asda streamlined its banana purchasing, leaving Del Monte as its exclusive supplier, triggering a price war. Exports of bananas from St Vincent and the Grenadines have fallen from 78,000 tonnes in 1992, valued at US$72.8m. By last year this had fallen to 42,000 tonnes, raising just $55m. Some banana growers have switched to growing marijuana.
Ethical shoppers may be aware that Del Monte sources most of its bananas from Ecuador and Cameroon, two countries which stand accused of human rights abuses. However, ethical shoppers do not form the backbone of Asda’s customers.
Gonsalves sees a purchase of Safeway by Wal-Mart as the worst possible outcome, and favours the bid by Sainsbury’s.
His preference is apparently not shared by UK shoppers. A recent poll conducted by ICM for Retail Week shows that shoppers want to see four large supermarket groups, not three. Some 42% of respondents to the poll said that, if Safeway is to lose its independence, Morrisons would be their preferred buyer. Just 12% believed it would be “a bad thing” if Morrisons were to buy Safeway, compared with 31%, 33% and 35% for Tesco, Sainsbury’s and Asda respectivey.