Banana wars for supermarkets

Recent supermarket price wars publicise the lack of awareness, or care, for Fairtrade standards.

In an effort to gain market share, ASDA got the ball rolling with a 5p price cut per KG, with Sainsburys and Morrisons followed immediately, and eventually Sainsbury’s did the same, although their banana stock consists of only Fairtrade bananas.

The recent price cuts are not realistic margins for supermakets to be retailing, and in the end its the supplier, the farmers, who are affected, especially if they are unprotected by the current fairtrade standards, which is the case for a large proportion of farmers.

The problem from price cuts is the market won’t grow, because there’s a price cut, meaning the same quanitity of a product is being sold, but for less.

In the event of it opening up the market, it just means the market will become flooded, eventually driving the prices down for good.

With the current credit crunch, the likes of Tesco and Marks&Spencer are pushing hard to get customers through the doors, while the likes of discount supermakets, Netto and Aldi, effortlessly increase their customer turnover, day by day.

It should be remembered that they are also at the sharp end of rising production, transportation and living costs, and need more than ever before to earn a sustainable income in order to continue to provide UK shoppers with the nation’s favourite fruit.