The eruption of another banana price war between the multiples has attracted criticism from aid groups who claim it damages Fairtrade sales.
Asda slashed the price of loose bananas by 17p to just 68p/kg last week. And a few days later Tesco, Morrisons and Sainsbury's followed, cutting prices to 68p/kg. All four have been blasted for undermining producers' incomes and stepping back from fair trade policies.
"The decision to dramatically lower the price of loose bananas affects the farmer," said Caribbean industry analyst Christopher Stange. "Only through Fairtrade can producers in the Windwards Islands remain in the market."
The price cuts make Fairtrade bananas look more expensive than conventional ones, just months after Sainsbury's and The Co-operative Group levelled the cost of both lines to boost Fairtrade sales.
"This price war is a complete divergence from commitments made by certain supermarkets and undermines the good work that is being done to ensure the banana industry remains just," Stange added.
Action Aid has just published a report on fair trade that claims some Costa Rican banana workers earn just 33p per hour. Called Who Pays?, it blames supermarket price pressure for the plight of these third world workers.
"Past performance shows that when UK supermarkets slash banana prices, workers take the hit," said policy officer Dominic Eagleton. "One way to ensure they get a fair deal is for the Competition Commission to set up an independent watchdog that would keep supermarkets in check."
Others dismissed the accusations, however. Tim Kershaw of supply chain consultant Libra Europe said banana importers such as Fyffes and Dole would pay for the cuts - not the producers themselves.
"Bananas trade in dollars and therefore, prices in sterling have been artificially high over the past year as the dollar has weakened."
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