South American Exporters Complain About Bananas Sold at €0.88/kg at Kaufland

2024-04-12

In its flyer from April 4 to 10, the German supermarket chain Kaufland offered bananas from Ecuador and Colombia at a promotional price of €0.88 per kilogram. South American banana producers and exporters associations accuse: "These below-cost practices ignore the efforts of a sustainable supply chain. Supermarkets and discounters should inform consumers about the efforts behind a sustainable fruit, respecting certification standards and strict market regulations, by selling bananas at a fair price."

The associations of banana producers and exporters from Colombia, Costa Rica, Ecuador, Guatemala, Peru, and the Dominican Republic have found that the German chain Kaufland is currently advertising an offer for a kilogram of bananas of Latin American origin at €0.88. The offer, also on the brand's website, is related to the flyer from April 4 to 10: the bananas come from Ecuador and Colombia.

"As representatives of the Latin American banana sector, we reject the adoption of this type of practices that do not take into account the role of supermarkets and discounters in shared responsibility," the corporations write in a joint note. "Retailers must contribute to adequately inform end consumers about the efforts that banana producers undertake to bring them a sustainable fruit, which respects certification standards and strict market regulations, advertising bananas at a fair price." Kaufland is part of the group of German supermarkets of the "sustainable chains project" coordinated by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), which, according to its statements, aims to promote sustainable practices for product sourcing and to ensure a dignified life for supply chain actors. However, in this case, Kaufland contradicts these intentions by demonstrating a lack of real commitment, not considering mechanisms to guarantee the payment of a fair price, promoting unfair price practices, and not contributing to adequately informing end consumers.

Within the framework of the fourth global conference of the World Banana Forum, representatives of banana producers and exporters have requested urgent actions and a concrete commitment from European supermarkets to achieve the sector's sustainability. "However, unfortunately, we once again observe how a chain participates in projects and programs that divert its objectives from the real problem, namely the lack of shared responsibility, and how in its practices it adopts mechanisms that damage the sustainability of Latin American banana production," continue the associations of South American banana producers and exporters. For now, the request for shared responsibility from banana exporters is limited to German or other European retailers and no other markets. Also, shipping lines, transporters, cardboard factories that produce the boxes where bananas are packed, and suppliers of fertilizers and other products used in the banana trade have yet to be required to share responsibility. The media campaigns of the banana exporters have yet to produce the needed effects, and bananas continue to be the cheapest fruit sold. Exporters' efforts to find alternative markets have yet to sort any impact. Great hopes are for China to increase imports, particularly from Ecuador, although the Asian giant recently increased imports from Vietnam, Cambodia, and Laos. Among the problems faced by the Southern American banana exporters is the strength of the USD against the Euro, which mainly affects Ecuador, which has a dollarized economy, but also Costa Rica and Colombia, where the local currency, the Colon and the Peso have revalued considerably against the USD and make their exports to the Eurozone less competitive. Bananas are the most sensitive fruit because they grow yearly and must be cut weekly. According to a Spanish report, food prices have increased by over 38% in the last three years, while recent data in the USA shows that food is generally around 25% more expensive than before the pandemic. Consumers have also been resilient in buying fruit, including bananas, which might be one of the causes of the decreased consumption regardless of the fair price campaigns of the southern American and Canarian or African banana producers for higher prices for their fruit.

Kaufland's offer is added to other supermarkets and discounts that offer a Latin American banana for €1.19, "a final consumer price that undermines the sector's efforts towards sustainability." "The retail price of bananas has remained unchanged for decades, making them the cheapest fruit on supermarket shelves," concludes the note. "These retailers compete aggressively with promotions on fruit at below-cost prices, ignoring sustainable production efforts. "The fight for the "fair price and shared responsibility" continues.