The Fairtrade Foundation is calling on the government to intervene in a banana price war in supermarkets that is putting pressure on suppliers and ,it claims, could lead to shortages.
The foundation, which aims to protect farmers in developing countries, says the price of bananas in UK supermarkets has nearly halved in the past 10 years to just 11p, while farmers at the same time have seen costs double.
As ever they’re failing to see that this economy thing is all about making the consumer the very bestest off that we possibly can.
Or as Adam Smith put it:
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.
And as to what is actually happening in this market:
Gidney said some supermarkets may also be losing “hundreds of thousands of pounds per week” by selling bananas at a loss and called on the government to investigate what he called a “dysfunctional market”, which was not good for farmers, retailers or consumers in the long term.
But the British Retail Consortium denied that farmers were being squeezed.
“The fact that supermarkets are choosing to sell bananas at below margin cost has no relationship to what they are paying producers. Producers are getting a good price and customers are getting a good price as well. Supermarkets sell such an enormous range of products that they can choose to sell particular products at a loss.”
That is, sales of bananas are higher than they would otherwise be without the supermarket subsidies to the retail price. And this bonehead is complaining that banana farmers are losing out because they get higher sales without any decline in price as a result of said subsidy?