Britain's banana price wars come at a cost to growers

AFP, Wednesday 26 Feb 2014

When a banana flown half-way round the world costs half the price of a locally-grown apple, many in Britain wonder whether Latin American banana producers are getting a fair deal.

The British love eating bananas. Like milk or bread, it is considered a shopping essential, a reason why consumers choose one shop over another and a battleground in the supermarket price wars.

Britain's Fairtrade Foundation charity, which promotes fair wages for developing world producers, kicked off a campaign in London this week to declare a truce in the battle that ends up with growers, mostly in Latin America, selling their bananas at below the cost of production.

Britain is the only country among the bigger European states where bananas are now cheaper than they were a decade ago. In Germany, France and Italy, prices have risen.

A banana that cost 18 pence ($0.30, 22 euro cents) in Britain in 2002 now costs 11 pence -- around half the price of a locally-grown apple, according to the French Agricultural Research Centre for International Development.

Fairtrade Foundation chief executive Michael Gidney said: "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 as what they earn is worth less and less in their communities," he told a London press conference.

"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."

Alfonso Cantillo, a Colombian banana producer from the north coast Magdalena area who sells to Britain, was invited to London by Fairtrade to highlight the issue.

He said he receives $8.15 (5.95 euros) per 18-kilogramme box -- when his production costs are $9.

"We get no real benefit for what we invest. It's very frustrating," Cantillo said.

"When banana prices fall, we suffer from the impact. Our living conditions go down. We need price stability."

Not even the supermarkets are making money on bananas. Fairtrade said retailer representatives estimate the big chains may be losing hundreds of thousands of pounds (dollars, euros) a week as a result of banana price competition.

Each Briton eats around 100 bananas per year. Most are from Latin America: 28 percent from Colombia; 24 percent from the Dominican Republic; 16 percent from Ecuador and the remaining 32 percent from other countries.

The British reliance on bananas is a fairly new phenomenon, all thanks to refrigerated transport allowing them to be imported from across the Atlantic in huge volumes.
The nearest place where they grow is Spain's Canary Islands, off the northwest coast of Africa.

The British government instigated a national banana day in 1946, in which each child received a ration of one banana when imports resumed again.

It was a joyous way to lift the national mood after the hardships of World War II -- but not for Auberon Waugh and his sisters, whose father, the novelist Evelyn Waugh, ate theirs.

"It would be absurd to say that I never forgave him, but he was permanently marked down in my estimation from that moment," a traumatised Auberon Waugh wrote in his memoirs.

Fairtrade has focused on bananas rather than other produce because "what has happened on the price of bananas is quite extraordinary", said Barbara Crowther, their director of policy and public affairs.

Unlike bananas, says Fairtrade, the price of eggs, bread and sugar -- to name three basic foodstuffs -- have increased by between 40 percent and 120 percent since 2002.

The organisation blames a structural problem: competition laws prevent supermarkets from agreeing a minimum price, while the European Union has opened up its markets to ever more growers.

Fairtrade has written to Britain's business minister Vince Cable pushing for a probe.

"We are calling on you to urgently investigate retailer price wars on bananas, evaluate the impact on the long-term interests of banana producers and UK consumers and take action on the findings," says the letter from Gidney.

Of several major British supermarket chains contacted by AFP, only Sainsbury's would comment.

"Not all supermarkets are the same, and everyone who buys a banana from Sainsbury's knows the grower is getting a fair price, as set by Fairtrade," said Judith Batchelar, director of Sainsbury's Brand.

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