Warning over banana price wars

The Government is being urged to launch an investigation into "price wars" which are holding down the price of bananas and could force farmers in developing countries out of business.

A giant billboard made from over 5,000 bananas stands on Clapham Common in south London to mark the start of the Fairtrade Fortnight's 'Stick with Foncho to Make Bananas Fair' campaign
A giant billboard made from over 5,000 bananas stands on Clapham Common in south London to mark the start of the Fairtrade Fortnight's 'Stick with Foncho to Make Bananas Fair' campaign

Consumers are being pressed to join a new campaign by the Fairtrade Foundation, which warned that farmers and workers face poverty if the "dysfunctional" market is not tackled.

The price of bananas has almost halved in UK supermarkets over the past 10 years, while production costs have doubled.

Small farmers and plantation workers are "collateral damage" in the supermarket price wars, with the poorest people having to work harder because of the "ever-tightening squeeze" on what producers earn, it was warned.

The foundation unveiled a billboard in London made up of thousands of bananas to launch its campaign on the first day of Fairtrade Fortnight.

Chief executive Michael Gidney described the price war as "aggressive", saying: "We are calling on the Government to investigate this dysfunctional market, because it is unfair.

"A product that is worth billions of pounds in global trade relies on poverty-level income for the people who grow it."

Colombian banana farmer Albeiro Alfonso Cantillo - nicknamed Foncho - who is in the UK to support the campaign, said: "The prices here are too low for us to have a decent quality of life. We don't see real profit from the effort we put in."

Campaigners believe unrelenting downward pressure on banana prices is leading to job losses and casualisation of labour in many banana-producing countries.

One in three bananas sold in the UK is fairtrade, but the cost has fallen from around 18p each a decade ago to 11p today - half the price of an apple grown in the UK.

Fairtrade products were launched in the UK 20 years ago and have become hugely successful in this country, with the market worth well over £1.5 billion.

Mr Gidney said in a letter to Business Secretary Vince Cable that the price of a kilo of loose bananas has fallen from £1.08 in 2002 to 68p.

"The pressure on price means that no one in the supply chain - retailers, banana companies or growers - are able to adequately invest in improving the sustainability of the banana industry."

Celebrities including comedian Harry Hill will join the unveiling of the "banana billboard", which is made up of 5,000 fairtrade bananas.

Judith Batchelar, director of Sainsbury's Brand said: "As the first major supermarket to switch to selling only fairtrade bananas in 2007 and as the largest retailer of fairtrade products in the world, we ensure a fair deal for tens of thousands of producers and their communities.

"Not all supermarkets are the same, and everyone who buys a banana from Sainsbury's knows the grower is getting a fair price, as set by fairtrade and a fairtrade premium goes to their community."

A spokeswoman for the Department for Business, Innovation and Skills, said: "We fully recognise the positive impact that the Fairtrade brand can have on consumers' shopping habits and in raising awareness of supply chain issues.

"However, it is not our policy to get involved in price-setting. The price that people pay at the checkout is down to the supermarkets. If there was a case for a competition issue then the Office of Fair Trading would be able to consider investigating."