France study finds 81% higher retail margins on organic produce

A study by the consumer group Que Choisir Ensemble has found that supermarkets in France apply higher gross margins to organic fruit and vegetables than to conventionally grown produce

According to the study the average gross margin on organic produce is 81 per cent higher than on comparable conventional products. The organisation described this as “an opportunistic margin policy in a niche market”

Using tomatoes as an example, the study found that consumers pay an average of US$6.84 (€5.84) per kilogram for organic tomatoes, compared with US$3.82 (€3.26) per kilogram for conventionally grown tomatoes

Of the retail price, farmers receive an average of US$2.57 (€2.19), or about 37 per cent, for organic tomatoes, compared with US$1.78 (€1.52), or about 47 per cent, for conventional tomatoes. According to the study, retailer margins are 113 per cent higher for the organic product

Que Choisir Ensemble said that, combined with higher production costs, “organic fruits and vegetables are subject to a double penalty that makes them even less affordable,” adding that the pricing practice was “structured and deliberate”

The findings were published shortly after a report by an investigative committee of the French Senate, which criticised large retailers over their commercial practices with manufacturers and farmers

Green Party Senator Antoinette Guhl said: “Out of every €100 spent on food, €8 goes to farmers, €14 to manufacturers, €35 to imports, and €40 to retailers.”

Retailers disputed the conclusions. Isabelle Senand, director of research at the Federation of Commerce and Distribution, said: “Higher prices for organic products primarily reflect higher production, logistics, and preservation costs.”

Source: www.freshplaza.com