Archived press release

Ten reasons supermarket mergers are bad for consumers

13 January 2003

With at least three of the biggest supermarkets jostling for the take-over of the supermarket chain Safeway, Friends of the Earth today criticised the proposed deals as bad news for consumers. The environmental campaign group attacked claims by the supermarkets that the deals would mean better prices for consumers.

In a recent survey, which included both Morrisons and Sainsbury, Friends of the Earth found that supermarkets were the most expensive place to buy apples. Local market stalls and greengrocers beat all the supermarkets on price. And a survey for Sustain in 2000 found that fruit and vegetables were around 30 per cent cheaper at market stalls than supermarkets.

Friends of the Earth surveyed prices at 151 supermarkets, 58 greengrocers and 29 markets. The results revealed the average price for a kilogramme of Cox apples was just £1.02 at market stalls, £1.07 at greengrocers, but £1.27 Morrisons and Asda-Walmart, and £1.44 at Sainsbury.

Friends of the Earth Food and Farming Campaigner Sandra Bell said:
“It is simply not true that either of these proposed deals will be good for consumers. They will mean the loss of more small shops, and people will have even less choice of where to buy their groceries. It is not even true that supermarkets are best for price. We found that supermarkets are the most expensive place to buy apples. The truth is that supermarkets only offer cheap prices on a very limited range of goods which are unlikely to be fresh healthy produce.

“The Government must ensure that these proposed deals are thoroughly investigated by the Competition Commission and it must put consumer choice, protection of small businesses and farmers above the financial interests of these big corporate retailers”

Friends of the Earth is also warning that further concentration of power in the hands of the big supermarkets will be bad news for small businesses, farmers and the environment. Friends of the Earth’s 10 reasons for not giving more power to the supermarkets are listed below.

Friends of the Earth is writing to the Office of Fair Trading and the Secretary of State for Trade and Industry calling on them to refer the proposed deals to the Competition Commission for a detailed investigation, including an assessment of the potential impact on local economies.

Why supermarkets are bad for consumers, farmers and small businesses

1. Supermarkets don’t offer the best price to consumers. Supermarket low prices are only on a very limited range of goods. A recent survey by Friends of the Earth found that supermarkets are the most expensive place to buy apples, market stalls and greengrocers beat the supermarkets, including Morrisons and Sainsbury’s on price [1]. A survey for Sustain in 2000 found that fruit and vegetables were around 30% cheaper at market stalls than supermarkets [2] .
   

2. Supermarkets favour imports over British produce. Although 84% of shoppers say they want supermarkets to give preference to British produce when it is in season [3] the supermarkets appear to do the opposite. A Friends of the Earth survey found that at the height of the UK apple season under half of the apples on offer in the big four supermarkets were home-grown [4].
   

3. Supermarkets’ bullying tactics can put small farmers out of business. The Competition Commission [5] found that the big supermarkets enter into unfair trading practices with their suppliers. For example supermarkets pay invoices very late, and they pass costs back to suppliers for changes to transport and packaging and even for their own mistakes in ordering. Because these practices can hamper suppliers investment in new products, and makes it hard for smaller businesses to compete, the Competition Commission warned that consumer choice may be effected.
   

4. Supermarkets are squeezing prices to farmers. Last year the NFU found that for a basket of food costing the consumer £37 the farmers would only have got £11. The Competition Commission found that Tesco which has the biggest market share paid the lowest prices [5].
   

5. Supermarkets are forcing small shops out of business. About eight independent shops close every day [6]. Small independent shops cannot compete with the big multiples.
   

6. Supermarkets do not support the local economy in the same way that local shops do. The New Economics Foundation [7] has found that local shops keep more money circulating in the local economy.
   

7. When a large supermarket opens there is a net loss of jobs. The British Retail Planning Forum found that every time a large supermarket opens on average 276 jobs are lost [8].
   

8. Supermarkets import food over huge distances, often by air, resulting in large emissions of carbon dioxide. For example two kilos of baby carrots from South Africa will travel 9,622 km by plane and result in emissions of 10,969 grammes of global warming carbon dioxide [9].
   

9. Supermarkets also transport food large distances around the UK due to their distribution system. For example according to the Institute of Grocery Distribution Sainsbury’s vehicles clocked up 15.7 million km last year and Asda-Walmart clocked up 147.9 million [10].
   

10. Supermarkets waste food by placing difficult conditions on farmers for cosmetic appearance. In a Friends of the Earth survey of apple growers [11] we found that supermarkets frequently reject fruit for being the wrong shape size or colour even though it is perfectly edible
    

Notes

[1] In October 2002, Friends of the Earth surveyed 151 supermarkets, 58 greengrocers and 29 markets, the results revealed that the average price for a kg of cox apples was just £1.02 at market stalls, £1.07 at greengrocers, but at Morrions or Asda-Walmart would cost £1.27 and at Sainsburys would cost as much as £1.44.
[2] Sustain, 2000, A Battle in Store
[3] NOP Omnibus, carried out the poll between the 8th and 10th November, see Friends of the Earth press release 18 November 2002 New Poll Shows Public Back Farmers v Supermarkets
[4] Friends of the Earth media briefing British Apples for Sale, November 2002
[5] Competition Commission, October 2000, Supermarkets
[6] Grocer Yearbook, 2002
[7] NEF, 2002, Ghost Town Britain
[8] British Retail Planning Forum, 1998, the impact of out-of-centre food superstores on local retail employment
[9] Sustain, 2001, Eating Oil, Food Supply in a Changing Climate
[10] The Grocer, 4 January 2003
[11] Friends of the Earth media briefing, November 2002, Supermarkets and Great British Fruit

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Published by Friends of the Earth Trust