Local grocer in banana war on supermarkets

Author: By James Thompson

Andrew Thornton, who owns two Budgens in the capital, has vowed to give his
profits on bananas in November to Costa Rican workers alongside a campaign,
Play Fair, Trade Fair.

His move comes after Aldi, the discounter, drove down the price of a bunch of
bananas to an all time low of 37p a kilo last month and kept it there until
last week. Asda and Morrisons went down to as low as 38p and 39p,
respectively, although all three grocers have now raised their prices. By
volume, grocers sell more bananas than any other food item in the weekly
shopping basket. The average price of a kilo of bananas has fallen almost
two thirds since 2002.

Mr Thornton said: ?We are doing this because the situation is ridiculous with
prices spiralling onward and downward and no one is prepared to stand up to
Asda. I don?t think that consumers really understand the impact of buying
cheap bananas. At the moment retailers say they are absorbing the price
reductions, but ultimately the price cuts get passed down the chain to the
workers in Costa Rica at the end.? He said that workers in Costa Rica have
to work 15 hours, six days a week to earn a minimum weekly wage in the
country ? which is equal to 33p an hour.

The profits made on bananas by Mr Thorntons? two stores, in Crouch End and
Belsize Park, will be channelled by Banana Link, the non-government
organisation, to a Costa Rican workers? organisation, which is struggling to
get involved in Fairtrade.

Alistair Smith, the international co-ordinator at Banana Link, said: ?The way
that Asda and Aldi have led the dramatic banana price wars downward to
historically low levels over the past six weeks is irresponsible. In our
view, the claims that they are taking the hit at the moment are totally
disingenuous because when it comes to the next round of price negotiations
with suppliers you know the first question will be: ?How much sacrifice can
you make???

Banana Link claims that Wal-Mart, the parent of Asda, has also reduced its
banana prices recently. Wal-Mart did not return calls and Asda said that
both companies set their prices separately. Mr Smith said the Wal-Mart
strategy on bananas is a ?potential worry because it could lead to all the
value being stripped out from the world banana market, which for all
retailers could be suicidal?.

An Asda spokesman said: ?We were very clear that we have a certain amount of
money to invest that is funded by us not workers. This is absolutely not
pushed down to the growers.?

An Aldi spokesman said: ?Aldi?s pricing policy is to follow the competitive
market environment. We are currently therefore retailing our bananas at
£0.49 per kilo. It is the clear policy of Aldi to have a long-term positive
relationship with our suppliers and therefore we will not allow market
turbulence to have any impact on the growers of bananas?.

Last month (October), Tesco maintained the price of a kilo of loose bananas at
50p and Sainsbury?s kept its price at 46p a kilo. However, in early October
Tesco did lower the price of its value pack of bananas to 35p, although it
raised them to 47p on 28 October.

Waitrose, which only sells Fairtrade bananas, has warned of the consequences
of its rivals driving down the price of bananas.

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