'Stop supermarkets abusing their buyer power' is the campaign call from the Make Fruit Fair campaign which wants supermarkets, as the most powerful actors along the supply chain, to pay fair prices to their suppliers. Consumers throughout Europe are being mobilised to petition Barroso for the EC regulation of supermarket buying practices through a Code of Practice enforced and monitored by an ombudsman.
Bananas and pineapples are amongst the most traded fruits in the world. Most are grown on large plantations producing for, or owned by, big fruit companies including Chiquita, Del Monte and Dole. These companies are themselves under pressure from supermarkets to supply cheap fruit. In Latin America and Africa millions of people depend on this trade. The true cost of producing these tropical fruits is often paid by these workers, their families and their environment. Buying fresh fruits in supermarkets can be the closest contact we have with producer countries and the consumer choices we make can have a direct impact on how people are employed and paid and how their environments are treated.
Supermarkets can achieve substantial profits by squeezing suppliers and paying unsustainably low prices for bananas and pineapples. Supermarkets price wars in bananas, and more recently in pineapples, continue to push prices ever lower encouraging low wages, poor working conditions, labour right abuses, inadequate health and safety standards and weak environmental protection.
Five supermarket chains control between 70-80% of the grocery retail sector in the UK, Germany and France with increasing market concentration in the Czech Republic too. Supermarkets use their subsequent buyer power not only to impose low prices but can also demand retrospective discounts, delay payments and threaten to delist (stop buying from) suppliers. As grocery market share becomes concentrated in the hands of fewer retailers, suppliers have little option but to accept such conditions.
Existing competition policy at national and at EU level does not cover abuses of buying power and their impact on non-EU suppliers, whilst national legislation cannot effectively be used to hold supermarkets for account for the impact that their purchasing practices can have in exporting regions throughout the developing world. Many supermarkets have developed corporate social responsibility policies to address social and environmental standards along their supply chains and are signed up to a range of voluntary initiatives. Workers and their unions have however reported little if any change on the ground as a result.
'I cannot afford to feed my family despite working 6 days a week. The long hours, heat and physical demands of the job exhaust me but there is no other employment. Surely the people buying the fruit we harvest don't know the truth about how we have to work.' Ricardo Pena, employed on a banana plantation in Costa Rica*
In 2008 a Written Declaration signed by 436 MEPS asking the European Commission to investigate the negative impacts of supermarket buyer power was adopted. As a result the European Commission is now developing a Code of Practice that could encourage supermarkets to improve buying practices. This is a crucial time to lobby the EC to create a Code of Practice which applies to overseas and indirect suppliers and could therefore address how abuses of buyer power negatively affect conditions for plantation workers and small farmers. To be effective a Code of Practice needs enforcing and monitoring by an independent body that can accept anonymous complaints and thus overcome the current climate of fear amongst those supplying goods to supermarkets.
'A Code of Practice and enforement body would represent some progress BUT existing competition policy at EU level does not cover abuses of buying power and their impact on non-EU suppliers. We believe that a rethinking of competition law is needed so that new EU legislation can ensure that the people producing the goods on our supermarket shelves are treated justly and rewarded fairly for their work.' Jacqui Mackay, National Coordinator, Banana Link
Make Fruit Fair is asking consumers to call on the EC to initiate a complete revision of competition law as the only way to effectively reddress the devastating consequences for workers in supplier countries of the growth in unregulated supermarket buyer power. Simultaneously tackling the problem of supermarket power, as well seeking to improve their buying practices, provides the best opportunity to create fairer supermarket supply chains for the benefit of workers, small farmers and their communities. The petition will be presented to the European Commission in Brussels in June.
Visit Make Fruit Fair to sign the petition.
Read the press release.