Disproportions between prices which farmers received and selling in retail

The Office of Competition and Consumer Protection (UOKiK) in Poland took a closer look on the disproportions between prices for fruits and vegetables which farmers receive and prices of the same products sold in retail chains.

UOKiK checked the data on a "backward" basis. They examined the prices of selected products in the store, and then after invoices, through intermediaries they came to the end of the chain - to farmers. The analysis concerned products in five stores belonging to the following supermarket chains: Auchan, Biedronka, Carrefour, Lidl and Tesco. The analysis was carried out by the Provincial Inspectorates of UOKiK in Krakow, Warsaw and PoznaƄ. The controllers checked the current prices of onions, potatoes and apples and holiday rates for cherries and raspberries.

Although the analysis had a pilot character and cannot be applied to the entire market, it showed some specific cases in which the food producer earned a disproportionate income compared to the work put in and the risk involved. Therefore, UOKiK appeals to retail chains to introduce programmes that will guarantee Polish farmers fair prices for their production, no legal actions are foreseen at this moment.

The analysis showed that in most cases there are several intermediaries between the farmer and the store, who have a significant impact on the final prices of vegetables or fruits offered in stores. In the case of apples, the profit of intermediaries ranged from 10 to 77 % of the final price, and stores from 9 to 27 %. The analysis of UOKiK showed that in the worst case, the fruit-grower earned only 14% of the final price of apples. Assuming that a kilo of apples cost 2 zlotys, it means that it could happen that the farmer earned only 28 groszy, despite the risks and huge work involved.

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Some other results of the analysis are presented below:

  • Raspberries: Farmers received from 26 to 58% of the final price the consumer paid. Intermediaries received from 10 to 42%, and retail chains from 9 to 27%.
  • Cherries: Farmers received from 15 to 50% of the final price offered in supermarket, and intermediaries received from 17 to 26%, whereas retail chains from 25-68%.
  • Onions: Producer earnings ranged from 19 to 83% of the final price offered in supermarket, intermediaries from 43 to 52%. (in addition, in one case, the intermediaries sold the product to the store cheaper than they bought from the farmer), and the stores received from 7 to 35%.
  • Potatoes: The share of farmers in the final price ranged from 26 to 68%, and intermediaries from 3 to 53%. Earnings from stores range from 7 to 36% of prices on the shelf.

The material collected by UOKiK is for illustrative purposes only, however, the observed dependencies may be the starting point for retail chains willing to implement solutions promoting Polish food and supporting Polish farmers.

Source: uokik

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