The Cheap Food Myth

This has been now published in “The San”, my local coop mag. It is a summarised re-write of “What’s wrong with supermarkets?” by Corporate Watch, “made” with people you want to join to your food buying group in mind.

We all love the lure of cheap things. And, food being one of those things that we actually do need to buy, there seems to be something truly special about CHEAP FOOD. And variety. Nothing beats the freedom and choice that the opportunity to select from six different brands of cut-price oven chips at three in the morning represents.

Or does it? Here is this month’s wet blanket to inform you that there is no such thing as cheap food. The ‘cheap food’ that the supermarkets sell comes at a high price to taxpayers, small manufacturers, small farmers and the environment.

The UK grocery market is controlled by the supermarket multiples, widely known as household names. According to the Institute of Grocery Retailing (IGD) in 2001, the major supermarket multiples made up 60% of the market and convenience retailers made up 20%. Whilst none of the supermarket chains have a monopoly (classically defined by having more than 25% of the market share), together they have an ‘oligopoly’. To provide customers with the huge variety of inexpensive food that they promise, supermarkets exploit their effective monopoly.

They employ researchers to discover precisely what the average cost of production is for a particular crop worldwide, then conduct blind auctions over the internet and buy only when the price has fallen to the lowest level. Only multinational corporations and successful brands have any leverage with the big suppliers. The Competition Commission Report on Supermarkets (2000) cited 30 alleged exploitative supermarket practices over suppliers, including charging suppliers for supermarket errors. All of the supermarkets admitted to the Competition Commission that they requested suppliers ‘to make a payment for better positioning of products in stores’, ‘unreasonably transferring risks to the supplier’, and demanded ‘non-cost related payments’ (Quoted in ‘Summary Of Supermarkets: A report on the supply of groceries from multiple stores in the United Kingdom.’ , DTI). Farmers are frequently paid less than the cost of production for their goods. In some sectors the difference is made up by the taxpayer through subsidies. While farmers are often blamed in the media for being ‘subsidy junkies’, agricultural subsidies essentially go straight into supermarket profits.

To make a living, farmers have adopted more intensive methods to produce more to sell. Also, to achieve the blemish-free perfect 7.4 inch carrot, pesticides, fertilizers and factory farming are necessary. Up to 40% of perfectly good product will be discarded to meet the cosmetic perfection apparently demanded by UK consumers. It is not surprising that most food manufacturers support the logical conclusion of uniform food: genetic engineering, intensive farming and pesticides. There are numerous incidences of farm-workers and others being poisoned by pesticides. There is also evidence of corporate irresponsibility in the manufacture and labelling of pesticides (see Corporate Watch reports).

Supermarkets also have an adverse effect on local jobs. While some claim that they create jobs, the British Retail Planning Forum (1998), financed by the supermarkets themselves, discovered that every time a large supermarket opens, on average, 276 jobs are lost. A Panorama documentary screened in June 2000 exposed just how vulnerable migrant workers are to exploitation by gangmasters. Gangmasters, who act as an informal employment agency, hire casual migrant labour to work on industrial farms, in packhouses and canning factories. They produce much of the food that ends up on supermarket shelves, but find themselves exploited and unable to return home as they are indebted to the gangmasters who pay them next to nothing. The major supermarkets employ around three-quarters of a million people in the UK. Over two-thirds of employees in food retailing are part-time, the majority are women, and many are students and temporary or agency workers. The pay of most retail checkout operators (84% women) falls into the bottom ten percent for non-manual occupations. A significant percentage do not earn enough to pay National Insurance contributions and are thus excluded from pensions and other contribution-based benefits.

Cheap food is a myth. The reduced price is achieved at the cost of the most vulnerable participants in the production and distribution chain. And then the consumer pays in the shop and a second time in taxes through direct subsidies to farmers. The consumer also pays the price in ill health and increased risk of disease.

The drive for cheap food has been behind every major food catastrophe of the past decade. For instance, feeding ground-up animals to cattle as a cheap source of protein is generally recognised as the initial cause of BSE.

An increasing amount of processed organic food and fair trade products are finding their way onto supermarket shelves. These products give the impression of a caring, sharing company and are a major growth area. Organic enthusiasts question whether the corporate appropriation of the organic sector, including importing cheaper products and bankrupting small-scale UK farmers, is true to the original social and environmental aims of the movement. And there is evidence that supermarkets are charging an unnecessary premium for these ‘ethical’ products because they know that customers who care will pay more for them.

What can we do about it? There are alternatives to supermarkets that are community focused, environmentally sustainable and gathering momentum.
•Take an interest in where your food comes from.
•Grow your own vegetables.
•Boycott supermarkets and large food manufacturers.
•Support small, independent suppliers, processors and retailers.
•Buy imported goods only when they cannot be grown in this country.
•Encourage small retailers to stock locally produced food.
•Help set up new methods of distribution locally, e.g. co-operatives for marketing local produce locally, consumer co-operatives to buy healthy food in bulk for your community and delivery schemes.
•Consider becoming vegetarian or vegan as a way of reducing your own support for industrial farming methods.
•Support local farmers by using their farm shops and organic box schemes and going to farmers’ markets.
•Buy with us. The next order from SUMA will happen at the beginning of November.