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Supermarkets: Challenging the myth that they promote jobs and are good for the local economy |
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A report compiled by Philip Booth for Cllr. Sarah Lunnon. A companion report entitled “Living streets, local food” will soon be available with policies directed at creating a local, independent, vibrant economy.
First published: 6 December 2004. Last updated: 20 January 2004.
1. INTRODUCTION
During the last three decades, the UK has been transformed from what Napoleon described as a 'nation of shopkeepers', with innumerable small businesses, to a supermarket culture dominated by a handful of large retailers.
The main supermarkets now have over 81 per cent of the market and this is growing (1). To the astonishment of many, recent supermarket take overs have been approved without reference even to the Competition Commission (2). Tesco alone have 29 per cent of the grocery market and thanks to its move into clothing one in every £8 spent in Britain is now spent in Tesco .
Supermarkets immense influence is not just over what we buy and eat, but also the way we grow our food. They are shaping our landscape, our health and the way we interact socially. All this comes at a price.
Opposition is growing to the massive influence these retailers wield. New alliances are being formed on the base of research that is starting to expose the extent of supermarket power (3).
This report pulls together some of the issues that need to be considered in the light of plans for supermarkets in Dursley, Brockworth and Cinderford and any future plans for new supermarkets or expansions to existing sites. The report starts with a brief look at arguments in favour of supermarkets then summarises some of the key challenges to those myths. Further information is provided by the notes at the end.
The key challenges are made under the following headings:
LOCAL ECONOMY WILL SUFFER
JOBS WILL GO
LOCAL SHOPS WILL GO
LOCAL BUSINESSES AFFECTED
SHIFT WORK
VULNERABLE PEOPLE EXCLUDED
WASTE INCREASED
LOSS OF DIVERSITY, QUALITY AND FLAVOUR
HEALTH CONCERNS
PESTICIDE USE RISING
LOSS OF LOCAL FOOD
FOOD MILES INCREASING
FARM LABOUR EXPLOITED
UK FARMERS AND PRODUCERS AT RISK
OTHER ISSUES
2. SUPERMARKETS ARE GOOD
2.1. Time savers: Gone are the days of trawling the high street and we're not even restricted by opening hours, with many supermarkets now open 24 hours.
2.2. Choice: Supermarkets offer the choice of up to 40,000 lines - everything from economy to niche products at competitive prices; they provide free car-parking, home deliveries and internet shopping. And you can get supposed seasonal vegetables all year round.
2.3. Transport links: There are bus schemes and a small number of outlets offer taxi services.
2.4. Affordable: Supermarkets have reduced the cost of some grocery shopping and made one-time luxuries into basics.
2.5. Economics: In a speech last October to the Institute of Grocery Distribution, Tesco chief executive Terry Leahy said: "Independent planning consultants looked at our new store in Beverley, which we built on the site of the old cattle market. But far from damaging Beverley and its economy, the study found that Tesco acted as a magnet. Two-thirds of our customers visit other stores in the town centre, and local business leaders say that it has boosted Beverley's reputation as a place where people want to go to shop. So I would argue that strong supermarkets can also benefit local economies and local people" (4).
Leahy also said: "Now if we had been meeting, say, 10 years ago and had decided that the market was about right and that we should freeze it as it was, what would have happened? Sainsbury would be number one, Tesco would be struggling to keep up, suppliers would have smaller markets to serve, and customers would have been denied billions of pounds of real savings."
It is argued that this is one of the key reasons why governments have generally given supermarkets an easy regulatory ride - their buying power, and the intensity with which they compete, tends to keep a lid on inflation. However many other factors are also at work, like the influence the retailing and food industry has within and over government (5).
3. CHALLENGING THE MYTH
3.1. LOCAL ECONOMY WILL SUFFER - Large supermarkets generally attract customers away from independent shops and overwhelmingly source their produce from abroad, and their services "in house". The net result is that money is drained out of the local economy and redirected towards just a few large farms, large businesses and shareholders. The New Economics Foundation found that for every £1 spent on local food turns into £2.50 by recycling in the local economy. Spending the same in the supermarket generates only £1.40 (6).
3.2. JOBS WILL GO - The Retail Planning Forum found that there is an average net loss of 276 jobs every time a new store opens (7).
3.3. LOCAL SHOPS WILL GO - The Countryside Agency claims 7 out of 10 villages are now without a shop of any kind. Villages and towns without shops quickly lose their character and identity. Supermarkets often have long opening hours and a huge range of goods which threaten many local stores including: butchers, newsagents, fishmongers, bakeries, pharmacies, florists, insurance and banking, and shops selling books, CDs, DVDs, mobile phones, clothes, stationery, gardening supplies and more (8). Supermarkets are exploring other services including provision of gas, electricity, telephone and legal services.
3.4. LOCAL BUSINESSES AFFECTED - Supermarkets use single companies to supply everything from printing to cleaning contractors; local businesses lose trade. When local shops close, other local businesses are affected including accountants, solicitors, window-cleaners, carpenters, decorators and plumbers who all lose clients (9).
3.5. SHIFT WORK - Flexible hours suit some employees, but the system is not without problems. Staff can find their hours altered arbitrarily by managers to cover busy periods or staff shortages. Tesco staff turnover on the shop floor averages 29% a year (10).
3.6. VULNERABLE PEOPLE EXCLUDED - Not all consumers are in easy reach of a supermarket. Hard as it may be to believe, there are those who have no car, no internet, and whose shopping budgets are too small to qualify for home deliveries. Research by Panorama and Friends of the Earth have found many prices in supermarkets are higher than local shops and markets (11). Many bargains, like bulk buys exclude poorer consumers. Losing local stores also means losing a informal routes for unemployed back into work (12). The nature of supermarket check-out work means that the sometimes glazed expression of staff does not offer the social contact and conversation that can be found in a local shop; for some this is there only brush with other people they get each day.
3.7. WASTE INCREASED - Supermarkets use more packaging than most independent stores. Defra estimates supermarkets generate 200,000 tonnes of compostable material and up to 8 million tonnes of other landfill waste including an average of 323 plastic bags per household (13).
3.8. LOSS OF DIVERSITY, QUALITY AND FLAVOUR - Joanna Blythman in her book looking at supermarkets found they have led to an illusion of choice that disguises a loss of true diversity, quality and flavour. There are for example over 6000 varieties of apples, hundred more if you include cider apples. Yet today just 10 eating varieties are grown in nearly all our orchards and are supermarket shelves are dominated by imported apples (14).
3.9. HEALTH CONCERNS - Beside the health scares associated with factory farming and food handling, supermarkets actively promote many unhealthy foods, which can lead to diet related diseases such as cardiovascular disease, cancers, osteoporosis, diabetes, dental problems and vitamin and iron deficiencies. Obesity is only now being recognised as a food-related disease of epidemic proportions in the UK. Britain now spends three times more than any other country in Europe on ready meals. It is a rapidly growing market, despite many of these meals, including so-called “healthy” meals not being very good for our health (15).
3.10. PESTICIDE USE RISING - Cosmetic perfection has led to rapid increases in pesticide usage that includes chemicals that are highly carcinogenic, hormone disrupting and cause damage to the nervous system. Pesticide use has led to a loss of biodiversity. Government tests for residues show safety limits are often exceeded (16). Britain has had to invest £1 billion in equipment to remove pesticides from our water which regularly exceed safety limits (17).
3.11. LOSS OF LOCAL FOOD - In the rest of Europe consumers expect most products to be local (18). In the last year in the UK, supermarkets have made some gestures towards local foods, but it seems it is more a marketing tactic than a commitment to change the way they source food. Small local producers don’t suit supermarkets which want identical products in large volumes every day of the year. Asda, for example says that just over 2 per cent of their lines are local/regional products. Tesco say local purchases make up one per cent of turnover(19).
3.12. FOOD MILES INCREASING - It is estimated that the use of energy for transport and handling of food is 16-21% of the UK’s total energy bill and between a third and 40 % of all UK road freight is thanks to food travelling around the country. This huge increasing use of fuel means more CO2 emissions, climate change, traffic congestion, asthma, food that is nutritionally inferior and damage to food supplies (20).
3.13. FARM LABOUR EXPLOITED- Supermarkets have transferred risk to producers. Farmers being squeezed so tightly only have control over labour costs. Ruthless competition to cut prices is part of the reason for the market in illegal migrant workers being used. Estimates in the 1990s suggest up to 50 per cent of workers in agriculture and food processing are controlled by gangmasters with perhaps 100,000 workers involved, of these, around 30,000 could be undocumented migrants. Some people suggest the figure is much higher. The significant extent of the abuse and overwork of these workers is starting to be documented (21).
3.14. UK FARMERS AND PRODUCERS AT RISK - Fifty years ago, farmers received between 50 and 60 per cent of the money consumers spent on food. Today that is now only 7 per cent in the UK. In France where supermarkets do not hold so much power it is 18 per cent. The Government expects up to a quarter of the UK’s farms to close or merge. 12 farms each day are disappearing. 50,000 farmers could be forced to leave the land. British dairy farmers for example now get less money for their milk than they did 20 years ago: 40 dairy farms are closing every week (22).
3.15. OTHER ISSUES - This briefing does not cover a huge range of other issues that relate to supermarkets; labelling, health and safety requirements, GM, factory farming and animal welfare, additives, invasion of privacy, marketing techniques, the role of supermarket buyers, the role of our government, the World Trade Organisation, subsidies, organic food.
4. CONCLUSIONS
The supermarkets, food processors and agro-chemical manufacturers, with a nod from the government, have created a system of agriculture and retailing that seems to care only for shareholders and profit margins. It’s aim is “efficiency” , but which is better described as reducing meaningful employment, diversity of produce and wildlife, and the professed goal of “cheap food” - this latter consists not of reducing costs per se, but of offloading costs onto taxpayers, small farmers and the environment.
Ultimately the ‘cheap food’ and ‘choice’ supermarkets claim are a myth. The consumer pays three times: once in the shop, again through subsidies and finally in taxes. That latter would include cleaning up the mess left by industrial agriculture (including over £1 billion to remove pesticides from water) and subsidising the transport infrastructure.
The supermarkets and big processors are increasing their share of the profit margin by squeezing the whole supply chain, and the farmers at the end of the chain are in the weakest position. Agricultural subsidies essentially go straight into supermarket profits. Tesco expect £2 billion profit for 2004.
When confronted with these charges of exploitation, supermarkets cast the blame elsewhere. Either it's the free market and we can import milk more cheaply from Eastern Europe or New Zealand. Or, it’s the WTO will clamp down on us for price-fixing (i.e. paying a fair price). Or, it's the middlemen creaming off all the profits not us.
The truth is that our global economic system is at fault, but it is also the supermarkets, through lobbying governments and the WTO, who have manipulated the system to suit themselves. As for the 'middlemen', there are for example, seven large processors in the dairy industry, and, although not blameless, they were also affected by the drop in the price paid for milk by the supermarkets.
Farmers are in an extremely weak negotiating position; frequently being paid less than the cost of production for their goods. They used to have some bargaining power on the basis of seasonality, but imports and glasshouses have destroyed this advantage. Now farmers are squeezed by a limited number of buyers, big suppliers and global oversupply. To make a living, farmers have adopted more intensive methods to produce more to sell, and have invested their savings. This may make sense on an individual level, but ultimately works against their interests, creating over-production and a further decrease in prices.
Farmers in mainland Europe have formed co-operatives so that with more to sell they can demand a better price. It is ironic that the Competition Commission broke up the large UK dairy farmers co-operative, Milk Marque, in 1999 whilst allowing supermarkets to continue with their monopoly (23).
In conclusion there is much and growing evidence to suggest that supermarkets are not good for our communities and will not help build a vibrant, local economy. When we look more closely at the hidden costs of supermarkets, the choice, convenience and value they supposedly offer becomes questionable. By putting small independent retailers out of business, they are hardly providing choice. By forcing consumers to use cars for their weekly shop, they are hardly convenient, and when we calculate the cost to the taxpayer, small farmers, our health and the environment of 'cheap food', it doesn't seem such good value.
This is not just the opinion of middle class environmentalists, as the recent submission by the National Consumer Council to the 'Food Policy Commission of Food and Farming by Low Income Consumers' shows (24). Supermarkets are not fair competition; in fact they are exploiting us. They are also preventing the development of a vibrant and exciting local food economy.
In the light of this, decisions to build new supermarkets or expand existing sites should be refused until full assessments of their impact are carried out.
A Green Party action plan for a local, independent, vibrant economy entitled, “Living streets, local food”, will soon be available.
4. ACKNOWLEDGEMENTS
Much of the information for this report comes from:
“The Ecologist” magazine - September 2004
“Not on the Label” - Felicity Lawrence ISBN0141015667
“Shopped” - Joanna Blythman ISBN0007158033
New Economics Foundation website: www.neweconomics.org
Green Party of England and Wales website: www.greenparty.org.uk
Corporate Watch website: www.corporatewatch.org.uk
Sustain - The Alliance for Better Food and Farming website: wwwsustainweb.org
Journalist George Monbiot’s website: www.monbiot.com
5. NOTES
(1) Supermarket dominance and growth
Tesco 29 per cent of the market was reported in Grocer Today News, Supermarkets win the Christmas battle, 13/01/05. Tesco annual profits are expected to pass £2 billion ie its UK sales account for 2.6% of the country's gross domestic product. With 237,000 staff in the UK, it employs twice as many people as the British army. On one calculation, in terms of stockmarket value, Tesco is worth more than Marks & Spencer, Sainsbury, Morrison (which also owns Safeway), Next and Dixons combined. (‘Shop tactics’ Nils Pratley and Julia Finch in The Guardian January 6, 2005).
Supermarket groups now account for almost half the retail sales in Europe. The market research group Mintel show that the concentration of power in the hands of food retailers is continuing. Between 1999 and 2003, the sales of all goods by food retailers in 19 European countries climbed rapidly, by almost 16% to 46% of the total retail market. The growth of supermarkets is being driven by their ability to capture a larger share of the market in goods other than food, such as electrical equipment and clothes. Over the next five years, Mintel forecasts that food retailers will continue to increase their share of all retailing in eight countries: Belgium, Germany, Hungary, Italy, the Netherlands, Poland, Portugal and Britain.
(2) Recent supermarket takeovers have gone unchallenged
To the astonishment of many, the OFT let through the £377m purchase of almost 1,000 stores and kiosks operated by T&S, admired for its network of One-Stop convenience stores. This was done without a reference to the Competition Commission, despite Tesco having in excess of 25% of the grocery market - a percentage that normally guarantees an investigation. The OFT however decided that weekly shopping in a supermarket is a separate market to top-up daily groceries bought in suburban convenience stores.
Since then other deals have followed like Sainsbury recent takeover of 114 Jacksons stores without any investigation of the impacts.
(3) New Alliances
In November 2004 the Green Party, Friends of the Earth, the Association of Convenience Stores, FARM and the National Federation of Women's Institutes and others asked the OFT to open a new investigation of supermarket domination of the grocery market in the form of a full Market Review. These groups are also demanding stricter controls over the supermarket sector and the appointment of a supermarkets watchdog. They want the OFT to launch a new inquiry and are asking people to lobby MPs to curtail supermarkets power and help protect local services and independent retailers.
The WI are also urging its members to think twice before going to a supermarket. The campaign, called "Breaking the Armlock", has become one of its best supported.
(4) The independent report shows no traffic chaos as predicted and that the town seems to have had a positive effect from the new Tesco. The report however fails to consider alternative ways that might have been possible for regeneration of the town. There are also many additional questions; how for example local farmers and grocery shops are now fairing, whether the type of shops on the High street has changed and whether any development on this site might have brought in the same or greater benefits. Criticisms also remain about the loss of heritage like the old cattle market.
(5) Numerous examples including Lord Sainsbury as Science Minister and Terry Leahy on various key committees. Another example is the battle to reduce sugar, salt and fat in food. Margaret Thatcher was so concerned by a report stating this - a report produced by her own National Advisory Committee on Nutrition Education - that she went to great lengths to try and bury the report (“Nutrition” in The Guardian 8/01/05). However the evidence has continued to accumulate.
In 1994 prominent food processing companies withdrew their funding from the Tory Party following plans being drawn up to reduce salt intake. Governments have learnt how difficult it is to tackle these powers. Labour now states the obesity time bomb is not primarily due to the type of food we eat, but lack of exercise. See The Ecologist November 2004 article by Joanna Blythman “THe new Tobacco”.
See also www.corporatewatch.org.uk
(6) Local, independent shops bring enormous social and economic benefits to the community
Money spent in a high street circulates around the local economy and generate more jobs, for example 81 shops in Suffolk employed 548 people and sourced food from 295 local producers (See Cranbrook C. 1997. The Rural Economy and Supermarkets. Great Glemham, Suffolk).
The New Economics Foundation also found that if every person, tourist and business switched just 1 per cent of their current spending to local goods and services, local economies would net, on average an extra £52 million annually.
“Off Our Trolleys” By Raven, Lang and Dumonteil (1995) shows that a typical out-of-town superstore causes £25,000-worth of congestion, pollution and associated damage to the local community every week.
A CPRE report (‘Local Food in Britain’ Nov.2001) found the rate of small shops closing is costing local economies about £550 million per year.
(7) The Retail Planning Forum, which is part-funded by the supermarkets, studied changes that had taken place in the areas surrounding 93 new superstores. the forum found that the stores were responsible for a net loss of 25,685 employees; every time a large supermarket opened, in other words 276 people lost their jobs.
The report also said; ‘If the superstores had not opened, employment would have risen. All of the reduction in employment that occurred in the catchment areas is attributable to superstore openings.” The report also found that there is 'strong evidence that new out-of-centre superstores have a negative net impact on retail employment up to 15 km away'.
(8) Local shops disappearing
The New Economics Foundation (nef) has published reports entitled “Ghost Town Britain” (2002) and “Clone Town Britain” (2004). They highlight the loss of Britain’s local shops and services. Over the five years to 2002, around 50 specialist stores closed every week. They identify that this can lead to the emergence of Ghost towns and communities with few or no services left or a Clone town where local shops are replaced by faceless chains or “fake” local supermarkets. Companies like Tesco are seen as destroying town centres by killing off other local businesses; sucking the money out of communities to remote shareholders, rather than circulating it in the local community.
“Shopped” by Joanna Blythman has further information about the loss of local shops that includes:
- Fishmongers are put out of business. Between 1990 and 2000 supermarket’s share of the fresh-fish market rose from 21.4 to more than 66 per cent, while fishmongers’ market share fell to 20.3 per cent. This has also led to the loss of anglers catching fish in rivers and sea fishermen. Both these groups have traditionally had direct relationships with fishmongers. Supermarkets are not interested in such small supplies.
- Local butchers are put out of business. In 1985 there were over 23,000 in the UK. By 2000 it had dropped to 9,721 - a loss of nearly 60 per cent of independent outlets.
- Community pharmacies are put out of business. The number of family-owned pharmacies has declined from 78 per cent of the sector in 1988 to 51 per cent today. Moves are afoot to lift existing restrictions on supermarkets to allow them to open up more pharmacy services, despite all the evidence that this is likely to adversely effect local pharmacies greatly.
- Independent garages are put out of business. Supermarkets in only 8 years moved from 8 per cent of the fuel market to 22 per cent in 1998. This was largely done by discounting fuel below cost which threatened the independent garages. Such garages often had repair shops that provided employment. The trend continues. 2,000 garages closed in the last year with the loss of 10,000 jobs.
- Newsagents and local stores put out of business. By 2000 three newsagents a day were closing. Supermarkets are now buying convenience stores and will likely use their muscle in the ways they have done before to reduce competition.
- Bakeries are also disappearing as supermarkets now control 85 per cent of the UK bread market. Again supermarkets are using the tactic of selling below cost, sometimes as little as 7p a loaf. This undercuts local shops and gets people in the doors to spend on the other goods that can often cost more than those at local shops. France, Germany, Ireland and Spain already have legislation to prohibit the selling of goods below the price paid by the retailer to the farmer.
- Other shops are also threatened. Books, clothes, stationery, gardening supplies and more. In 2003 Tesco chief executive Terry Leahy said: “We only have 5 per cent of the non-food market. There’s a lot left to go for.” At present £1 in every £7 spent in retailing is spent in a Tesco store - they have 27 per cent of the market.
There are examples of the negative impacts of new Tesco stores are available from Friends of the Earth at: www.foe.co.uk/resource/briefings/pps6_damage_town_centres.pdf (PDF†)
(9) Studies have shown that local communities could be losing inward investment of up to £100bn every year because of supermarket centralisation. That translates to £2000 for every persion in the country.
There are many examples of how Tesco try to gain dominance in a town. Tesco entry into the east Yorkshire town of Withernsea last year started with staff poaching. A representative was dispatched to the town's only established supermarket, to hand out cards with the words "you've impressed us" to members of staff. The cards gave a number to call to apply for a job at the soon-to-open Tesco half a mile up the road.
Proudfoot's, a family-owned business with just five shops against Tesco did not look like a fair fight, but customers were more loyal. There was only a 20 per cent drop in sales. Tesco's response to initial failureled to mailing out 40% discount vouchers to 6000 residents. Proudfoot's sales promptly dropped 35% below their pre-Tesco levels, threatening the store's viability. A direct appeal to Leahy brought an unsympathetic response from him: "Good retailers thrive on competition, and I am sure you will agree that those who understand their customers and provide what they want have nothing to fear from it." The OFT, which was asked to investigate, saw nothing wrong in Tesco's behaviour. Proudfoot seem to be surviving at the moment, but for how long?
(10) See “Shopped” - Joanna Blythman - Most retail checkout operators (84% women) fall in the bottom ten percent of non-manual occupations with average earnings of £184.70 a week. A significant percentage do not earn enough to pay NI contributions and are thus excluded from pensions and other contribution-based benefits.
(11) “The Ecologist” magazine - September 2004
(12) Lancaster University’s Management School found in theory we have more choice but in fact most of us feel more constrained than ever. Their research paints a worrying picture of the impact on vulnerable families. These include families on low incomes, many single-parent households and elderly people. As local shops close they become more reliant on superstores. They feel excluded from many of the bargains, eligibility for which depends on being able to buy goods in bulk; the richer get the better deals. The physical distances involved in walking the aisles can also be daunting for many elderly.
(13) “The Ecologist” magazine - September 2004
(14) As Joanna Blythman describes in “Shopped”, no country in Europe is so reliant on supermarkets for its food shopping as Britain. Supermarkets are by no means wholly responsible but it is no coincidence that the UK also has the worst eating habits in Europe.
The Guardian reports that we eat less fruit and veg than almost any other European country. Concern has also been raised that it is the lower-income families who are eating less and less fruit and veg. In Scotland for example research shows people eating less than one portion of fruit and veg a day and in England we only manage on average two portions, despite many European countries recommending nine (“Nutrition” in The Guardian 8/01/05).
Supermarkets pursuit of all year round availability of fruit and vegetables creates an artificial reality. Supermarkets source vast quantities of easy-to-retail, long shelf-life standard varieties that are grown to rigid size and cosmetic specifications and can be supplied 365 days a year.
Quality in supermarkets means matching shape, size, colour, low odour, acceptable sugar levels and pressure levels and not actively tasting unpleasant. Smells, for example, that indicate ripeness in say peaches or melons are not tolerated by supermarkets with their ”aroma management” policies.
No wonder fruit and vegetable consumption is declining. Many people have even stopped buying high price items like strawberries as they are so often disappointed. Poor ‘imitations’ of extraordinary foods like tomatoes, apples and sugar snap peas means a loss of these unique pleasures. We have lost so much of the excitement that true seasonality brings; lost an understanding of the seasons and the rhythm they bring to shopping and cooking.
Supermarkets claim they have broadened the British palate and introduced new tastes and flavours, but they are mainly selling us the same standard components, continuously reassembled and remarked in a multiplicity of forms. Joanna Blythman writes: “Any meat will probably be overcooked and dry - a consequence of bulk factory cooking followed by domestic reheating. A salty savouriness without any particular flavour profile prevails. Where a sauce or a liquid element is present, a gloopy consistency is de rigour. “
There are also few differences between supermarkets. Much of the food tastes the same; chilli con carne is the same as chilli beef bowl with different packaging, the cream sauce with your ‘cod-in-a-bag’ the same as the moussaka topping, chicken korma is little different from the exciting new “Regional Indian” format.
Hazlewood foods (who used to have a factory until recently in Nailsworth), is typical of suppliers; it produces chilled meals to 4 of the main supermarkets.
(15) Felicity Lawrence in The Guardian December 13, 2004 looked at a National Consumer Council (NCC) survey of policies on healthy eating amongst supermarkets. They found for example:
- Supermarket practices are increasing the inequalities between the diet and health of more affluent consumers and low-income shoppers.
- In most supermarkets, promotional activities, such as two for the price of one offers, big discounts or links to popular films and sporting events, were predominantly used to sell unhealthy foods such as sugary drinks and sweets.
- Morrisons had 25% more salt in everyday products such as sliced bread, beans, sausages, pizza and cornflakes than you would get in the same foods bought from the Co-op.
- Tesco devotes more than three times the amount of shelf space to junk foods and snacks such as crisps, biscuits and sweets as it does to fresh fruit, yet M&S divides its shelf space between the two categories almost equally.
The report, Rating Retailers for Health, gives an overall score to each of the main supermarkets for their contribution to a healthy diet, based on factors such as how much salt they have in their own-label processed foods, how good their nutrition labelling and advice is, and whether they promote junk foods more than healthy fresh foods in their stores.
Waitrose comes top overall with 6.5 out of 10, Sainsbury's second with 5.5 out of 10 and the Co-op third with five out of 10. The worst performers in the healthy food stakes include those pushing price cuts hardest, Morrisons, with two out of 10, Asda with three out of 10, and Tesco with 3.5 out of 10.
(16) As reported in “Not on the Label” by Felicity Lawrence, Government tests for residues show safety limits are often exceeded. Examples are many like nearly one in five lettuces exceed maximum residue levels and 6 per cent contain residues of pesticides not approved for use. Some doctors are very concerned, even by the low levels of residues.
Some crops are sprayed with as many as 36 different pesticides. So in an apparently healthy meal that includes salmon, brown bread, carrots. lettuce and strawberries one could be consuming more than a 100 pesticides.
Chlorine-water, 20 times stronger than in swimming pools, is also often used to wash salads and it leaves surface residues. Some chlorinated compounds cause cancer, but there is little research into foods treated with high doses of chlorine.
Little is known about what this does to an individuals health, but leading toxipathologist, Dr Howard says there is ample evidence that the pesticide cocktail effect is producing enormous changes.
The cocktail effect is where say three pesticides consumed together can have 100 times the damaging effect of each one eaten separately. Dr Howard says extremely low doses cause effects. One example he gives is the possible link with the earlier onset of puberty, which is linked to cancer in girls.
(17) Over 25,000 tons of pesticides are sprayed on British food crops each year. Britain has invested £1billion in equipment to remove pesticides from our water. There is an on-going cost estimated to be around £100 m per year which is paid for in our ever-increasing water bills. Cheap food is a myth. The consumer pays three times: once in the shop, twice through direct subsidies to farmers, and finally indirectly in taxes cleaning up the mess left by industrial agriculture and subsidising transport infrastructure. See “The Ecologist” magazine - September 2004.
(18) In this country supermarkets are just not interested in doing business with what they see as “small” businesses; 400 boxes here, 300 there. In France 90% of apples sold in supermarkets are domestic. In the UK it is only 25%. See: www.foe.co.uk/resource/briefings/apples_short_supply.pdf (PDF†)
Similarly, Israel dominates the UK herb market with it’s huge horticultural companies supplying supermarkets all year round whereas other European countries rely on local suppliers.
Yet surveys survey regularly find nearly 90 per cent of people would buy British food if it was more available. The runaway success of Farmers Markets like those in Gloucestershire, shows that people want to support their local producers. See “The Ecologist” magazine - September 2004.
(19) See “Shopped” - Joanna Blythman
(20) As storage is expensive, the supermarkets persuade farms and manufacturers to store produce on their behalf leading to refrigerated juggernauts visiting farms daily collecting just a few pallets of produce. Our motorways have become warehouses.
Other problems with food travelling large distances include loss of nutrients in food and increases in diseases like Foot and Mouth which were found to spread by the transportation of animals.
The average item of food purchased from a supermarket travels over 1000 miles. For every calorie of carrot, flown in from South Africa, we use 66 calories of fuel.
Aviation fuel is untaxed giving air freight a strong competitive advantage; airlines pay about 20p a litre, road-transport 90p. Both are effectively subsidised by the taxpayer, but air travel to such a considerable extent that it distorts the market.
Long distance transportation of food leads to many crazy situations like where in 1997, 126 million litres of liquid milk was imported into the UK at the same time as 270 million litres was exported out of the UK. A very different pattern of food growing and distribution would emerge if this was changed so that air and road paid the full cost.
Indeed much supermarket produce never tastes of much as it has been harvested prematurely to stop deteriration during transportation and on the shelf. Fresh produce simply does not travel well.
Products like loose-leaf spinach, with a shelf life of one or two days, are no longer sold. Instead more expensive baby-leaf spinach is sold in pillow packs that extend its life. However research has shown that these packs, “Modified-atmosphere packaging” (MAP), destroy vital nutrients in the foods. See “Shopped” - Joanna Blythman.
(21) Gangmaster profits are now significant; often with turnovers of £8m to £10m. Given that many of the workers, work 7 days a week and double shifts it is no wonder that productivity figures are good. As Prof. Tim Lang, Thames Valley University has said: “The reality is cheap food tends to mean cheap labour and we need to start thinking a lot more about this as we encourage supermarkets to vie with each other over price wars.” See “The Ecologist” magazine - September 2004.
MP's from the Environment, food and Rural Affairs Select Committee (2003) were damning of the supermarkets, stating, "We are convinced that the dominant position of supermarkets in relation to their suppliers is a significant contributory factor in creaing an environment where illegal activities by gangmasters can take root. Intense price competition and short timescales between orders put great pressure on suppliers who have little opportunity or incentive to check the legality of the labour which helps them meet these orders."
See reports: ‘Trading away our rights; women working in global supply chains’ Oxfam 2004 and ‘Homeworking in Britain: Flexible working or exploited labour?’ National Group on Homeworking, 2004
(22) Supermarkets rarely have written contracts with farmers or pack-houses promising to buy specific quantities, although farmers are obliged to supply certain amounts to supermarkets. The farmers are both required to take on the loss on any surplus and to meet any shortfall at their own expense by importing if their own harvests don’t meet demand.
Last year, for example producers had to import lettuces from the US at a considerable loss, to meet their committments.
See for example:www.foe.co.uk/resource/briefings/every_little_hurts.pdf (PDF†)
It is perhaps no wonder with all the pressures farmers face that every six days a farmer commits suicide. It is no wonder that by 2005, the Government expects up to a quarter of the UK’s farms to close or merge. 12 farms each day are disappearing. 50,000 farmers could be forced to leave the land.
We have lost nearly two-thirds of our apple orchards in less than 30 years. Local cattle breeds are also disappearing. Local butchers and farmers knew each other well and knew what each wanted. Supermarkets changed that. They were only interested in shape and fat cover so farmers quickly changed to continental breeds that grow faster and leaner. The quality of meat plummeted.
Another example is milk. Nationally organisations, like FARM, are challenging Tesco, “the greatest embodiment of the misbalance of power in the food chain”, to ensure farmers get a better deal. British dairy farmers now get less money for their milk than they did 20 years ago. For the past seven years, the average earnings of a dairy farmer has been just £2.90 an hour. Poverty milk prices are forcing over 2,000 dairy farms out of business – an average of 40 a week.
In the last decade, the average retail price for a litre of milk has risen from 41 to 48 pence. But in the same period, the price the farmer gets has fallen from 24 to 18 pence. For most farmers, this is less than it costs them to produce their milk.
As dairy farming disappears so rural communities disintegrate, wildlife habitats suffer and animal welfare deteriorates. A dairy cow used to produce 5-6,000 litres of milk each year. Now many farmers are forced to squeeze over 12,000 litres out of each cow just to make ends meet.
Smaller farms are most vulnerable, but it is they that often deliver the widest benefits to society. Small farms are known to provide better and more diverse habitats for wildlife. Meanwhile, they provide up to five times more jobs per acre than big farms. See Joanna Blythman, “Shopped” and FARM’s “Just milk” campaign.
See also Corporate Watch report May 2004; “A Rough Guide to the UK Farming Crisis”: http://www.corporatewatch.org.uk/agriculture/agriculture.htm
(23) 'Rip-off Britain' - The Competition Commission enquiry (Most information for this section has come from Corpwatch). In 1998, government ministers turned on the supermarkets, echoing a public perception that consumers in the UK were being 'ripped-off'. This was partly due to the perception that European supermarkets are cheaper and partly because of the evident disparity between farm gate and retail price.
Why, it was asked, were potato farmers losing between £17 and £27 on every ton of potatoes they take out of the ground?('Agriculture in Crisis: Why Britain's farmers are making a loss on nearly everything they grow.' The Independent 28th August 1999). Why is there a mark up of as much as 198% on apples and 439% on eggs in some superstores? (See ‘Captive State’ by George Monbiot).
In April 1999, the government launched a £20 million enquiry through the Competition Commission of the Department of Trade and Industry (DTI). The 16-month enquiry received thousands of submissions highlighting the overwhelming power of big retailers. These amount to three volumes, over 1100 pages.
- Lutterworth and District Dairy wrote that it was seeing the most alarming changes in its 100-year history due to the fierce activities of the multiples in undercutting doorstep milkmen.
- The Federation of Bakers claimed that by selling loaves for as little as 17p, the chains were making massive losses, but doing small bakers out of business.
Despite listing 52 practices that illustrate a complex monopoly situation, and concluding that 27 of these practices work against the public interest, the report amazingly gave the supermarkets a clean bill of health. It concluded that they do not hold a monopoly in grocery retailing and that they do not charge more than their European counterparts, taking into account exchange rate differences and the high value of the pound.
Critics claim that the Commission was asking the wrong questions. Whilst nationally at the time none of the supermarkets had a monopoly (more than 25% of the market share), they have been found to have extensive local monopolies. (see below). This means that there isn't a genuine local market to keep the prices down. Many also felt that the Competition Commission should also have investigated the social, environmental and health effects of supermarkets. These are also surely in the consumer's interest as well as price - which is the only monopoly effect that the Commission investigated.
Others argue that whilst no one supermarket has a monopoly over grocery retailing in the UK, the supermarkets together have an 'oligopoly', i.e. several supermarkets control the whole market and this situation constitutes a market failure and should be investigated. The report did admit to four situations where competition is broadly distorted and operates against the public interest ( 'A Summary of Supermarkets: A Report on the Supply of Groceries from Multiple Stores in the United Kingdom'. DTI, UK):
(i) The relationship between big supermarkets and their suppliers.The Commission called for an enforceable code of practice to ban practices such as demanding payments from suppliers for buyer's visits, charging them for the cost of refurbishing stores and changing agreed prices retrospectively or without notice. To the fury of the NFU and other supplier organisations, the DTI let the supermarkets draw up their own voluntary code of practice and dispute settling mechanisms. The only supermarkets included were those with over 8% market share.
This came up for review in March 2003; after taking a year to review the failings of the code, something that was surely very self-evident, the OFT decided that all it could do was to send auditors into the big four supermarkets to look for examples of malpractice. There is now a concerted call from suppliers large and small as well as development, environmental and farming groups for a binding code of conduct, independent dispute mechanisms and a retail regulator Meanwhile, farmers and other suppliers continue to suffer exploitation at the hands of the supermarkets.
(ii) Selling below cost price i.e. the use of loss leaders
(iii) Changing prices according to local competition i.e. price flexing. The Report found that in the South East, East Anglia and the West Midlands, shoppers pay more for their shopping. Tesco's prices varied as much as nine per cent regionally. The Commission, however, took the unprecedented step of making the recommendation to do nothing on the grounds that putting up the price would harm the disadvantaged. This was despite the finding that by undercutting small grocers and putting them out of business, supermarkets also restrict the choice of vulnerable consumers, such as the disabled, people on low incomes and the elderly with no cars.
(iv) There is limited choice of supermarkets in some areas. The Report found that in some places the giants have massive market shares: over fifty per cent for Tesco in Uxbridge, Milton Keynes, Cambridge, Twickenham and Salisbury. The same goes for Sainsbury in south-west London and Safeway in Dumfries. The Commission recommended that new planning legislation was be required generate competition and to give consumers more choice. It proposed that in areas where supermarkets were already strong, they should be required to obtain approval for new stores over 1000sq metres (around 10,800sq ft) from the Office of Fair Trading. The Commission was also concerned that certain chains are stifling competition by snapping up land on which rivals could build. Of 408 sites held in 'land banks', 190 are owned by Tesco.
(24) See Policy Commission on Food and Farming. www.cabinet-officde.gov.uk/farming
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