Value or ‘values’? Over the past 20 years we have heard one diatribe after another against ‘cheap food’ sold by supermarkets, allegedly at the expense of farmers, the environment, third-world producers and virtually everyone else - except, of course, the final consumer.
So we apparently need a food system based on ‘wider societal values’. How these values should be applied in the real world of producing and selling food in a competitive marketplace is never explained. A series of utopian generalities is typically all we get.
“Most consumers are concerned about the rising cost of food”
One thing, however, is very clear - the net effect will be a substantial increase in the cost of food to the consumer. Oh, but hasn’t the share of food in household spending dropped significantly over the past 50 years, proving that food is now too cheap? No. All it reflects is the changing composition of consumer spending and the increasing efficiency with which food is produced and distributed. Other product groups such as electrical goods, clothing and alcohol have also lost ground as leisure services, motoring and fuel and power have increased their share of household spending. Are the losers also too cheap?
But don’t consumers say they would pay more for their food if farmers got more and (big) retailers got less? Yes, but what they do in practice is quite different. Why are discounters like Aldi doing so well right now? Far from being too cheap, according to Which?, most consumers are concerned about the rising cost of food and a large minority are either struggling to feed themselves and their families or reducing the amount they buy. The current popularity of food banks in relatively well-off communities in the Thames Valley supports the Which? findings.
The final slug of naivety comes in the call for ‘fair’ (higher) prices for producers. Scale, efficiency, brand strength and bargaining power determine prices and margins in a competitive market. Any attempt to manipulate the rewards of one group above their market level would need collective action to achieve and sustain it - an impossibility under competition law. The ‘values’ argument is, in David Hume’s phrase, “nothing but sophistry and illusion”.
Kevin Hawkins is an independent retail consultant