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The Fairtrade Foundation today expressed great regret at the announcement by Asda Wal-Mart that it has further slashed the price of loose bananas to 59p a kilo. This move has triggered another round in the ongoing price war on bananas between supermarkets and has already been followed by other major players such as Tesco*. This latest cut represents a 46% fall from 2002 when bananas were sold at around £1.10 a kilo

Regardless of whether supermarkets take the ‘margin hit’ themselves in the short term, there’s no doubt that moves to reduce basic banana prices will inevitably create pressure on suppliers down the chain. Over recent years, falling banana prices have resulted in severe hardship for the producers involved, forcing smaller farmers out of the market and undermining efforts to improve environmental sustainability and pay and working conditions on larger plantations.

This latest move by retailers follows on from 2006, when Asda cut prices to 64p a kilo – again followed by other retailers. However, in the four weeks following the move, sales volumes of bananas overall actually fell 7.9%, according to TNS data reported in industry newswires, with expenditure reduced by 23.9% and customer penetration by 10%, wiping an estimated £7m off the category value. This would suggest that price cuts are not only damaging to farmers and workers, but also unnecessary from a consumer point of view.

The Fairtrade Foundation is dismayed that consumers are being misled into assuming that 59p a kilo is a sustainable price, when that is clearly not the case. Furthermore, this move widens the price differential between conventional bananas and Fairtrade certified bananas (as well as organic certified bananas) that regrettably creates more confusion among shoppers on the pricing issue.

The only way that consumers can be sure that the price cuts in shops do not result in pay cuts for banana growers is by choosing bananas carrying the FAIRTRADE Mark. This ensures that producer organisations receive an agreed, stable price for their bananas as well as a premium to invest in improving the future for their farming organisations and local communities. We applaud recent moves by Sainsbury’s and Waitrose to switch all their bananas to Fairtrade, and encourage shoppers in other major supermarkets to support this positive example by choosing Fairtrade bananas when they shop.

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For further information, phone 020 7440 7686/7695 or mobile 07770 957 451 or email eileen.maybin@fairtrade.org.uk or martine.julseth@fairtrade.org.uk.

Notes to editors:

*Supermarkets have cut the price of bananas four times in three months: The first announcement was made in April when the price of bananas was slashed to 74p a kilo. This was then quickly revised down within days to 68p a kilo. Prices were further reduced to 62p a kilo and the most recent reduction sees banana costing just 59p a kilo.