The real price of cheap food

Is the convenience of major supermarkets worth the hidden costs?
Zac Alstin | May 6 2015 | comment  



A recent report by Australian investigative journalists has revealed that farms and factories supplying Australia’s major supermarket and fast food chains are using “extreme labour exploitation, slave-like conditions and black market labour gangs” targeting migrant workers from Asia and Europe. The Four Corners investigation also found evidence of routine abuse, harassment and assault, including sexual assault and exploitation, along with underpayment of wages “with potentially hundreds of millions of dollars in stolen pay going missing every year.”

With workers denied bathroom and water breaks, forced to endure up to 22 hour shifts, and, in one case, made to sleep in a dog’s bed, the report has shocked and dismayed many consumers, with calls for government regulation and an appropriate response from the major retailers identified in the report, which includes Coles, Woolworths, Aldi, Costco, IGA, and fast food chains KFC and Red Rooster.

Like most consumer goods, the economics of our food supply chain are a mystery to the vast majority of consumers. We don’t know how the cost and the profits of any given item are distributed from grower to retailer, and various middle men along the way. Wholesalers do not, as a rule, advertise their prices, nor are the costs of packaging, transport, labour, and retail easy to estimate. It’s only when an obvious disparity, fraud, or injustice is brought to our attention that we realise something is wrong with the system, whether it be the exploitation and abuse of migrant workers, or less sinister examples such as the Coles "Baked Today, Sold Today" fiasco, which turned out to involve bread partially baked in Denmark, Germany and Ireland, shipped to Australia where it was “finished” in local ovens, earning the supermarket giant a $2.5 million fine from the Australian Competition and Consumer Commission.

The more we learn about Big Food, the less inclined we might be to shop at the major supermarkets. However, the lure of convenient fruit and vegetables, and often significantly cheaper meat and dairy items can be hard to resist. Not everyone has the time to drive out to early morning markets or remote retailers that deal direct with nearby growers. Most people don’t have the facilities or the confidence to purchase and store whole sides of lamb or quarters of beef at a time, or to buy their tomatoes in ten kilogram boxes, even if such bulk purchases provide dramatic savings.  We have been trained instead to appreciate the proximity and convenience of suburban supermarkets, enduring a weekly or twice-weekly rush after work to meet our immediate needs.

Together the two major supermarkets – Coles and Woolworths – command around 72% of the grocery market, nearly half of the petrol retail market, and about 60% of the national liquor retail market.  We are increasingly dependent on these corporate giants in an expanding range of economic activities including insurance and finance. But it isn’t clear that the major supermarkets are entirely conscious of the great responsibility that comes with their unprecedented power. We have slid quietly into an era of extreme disparity in knowledge between consumers and major retailers. On the one hand, many consumers have no idea which fruits and vegetables are in season, whether they are grown locally or imported, how much such produce ought to cost, or even what a “real” tomato should taste like.

On the other hand, Woolworths can now track your purchases through “rewards” and “flybuy” cards, and determine from your spending habits your statistical degree of risk and hence the corresponding premiums their insurance arm ought to offer you, as a Woolworths director explained:

"Because, you see, customers who drink lots of milk and eat lots of red meat are very, very good car insurance risks versus those who eat lots of pasta and rice, fill up their petrol at night, and drink spirits. What that means is we're able to tailor an insurance offer that targets those really good insurance risk customers,"

Major retailers not only have the power to observe their customers’ buying patterns, they also have the power to shape them.  A particularly galling misuse of this power can be found in the routine destruction and wastage of food that fails to meet the cosmetic specifications of major supermarkets.  In Australia that means 20 to 40% of fruit and vegetables never make it to the supermarket because they don’t meet specifications for size, shape, colour, and other factors that might make the produce appear less than perfect.

In 2012 the popular Sydney-based food blogger Not Quite Nigella took a behind-the-scenes look at the magnitude of this food waste, accompanying the Food Bank non-profit organisation that salvages tonnes of perfectly good “off spec” food and distributes it to adults and children in need.

As Not Quite Nigella reveals, it doesn’t take much to render a piece of produce “off spec”, and the criteria are often strange, petty, and dismaying.  Heads of broccoli that are “too large”, onions that have lost their outer layer of skin, melons with minor blemishes, potatoes with a lacy pattern on their skins, and pretty much any fruit or vegetable that is too small, too big, or the wrong shape.  Perhaps the worst examples are the Valencia oranges which tend to retain a green tinge as protection against the sun, even when the fruit is fully ripened; we don’t buy green oranges because we assume they aren’t ripe. Another source of waste are the seeded watermelons that must be grown in order to pollinate the more popular yet sterile seedless variety.  Since consumers don’t like to eat seeded watermelon anymore, those are left unpicked and ploughed back into the field.

Supermarkets' pandering to their customers’ desire for perfect fruit becomes a vicious cycle as we become more and more accustomed to the narrow standards of perfectly straight carrots, perfectly round melons, and produce of all varieties free from even the most superficial blemishes.  The more we are exposed to “perfect” fruit, the more sensitive we are toward deviations from this artificial cosmetic norm.  Blemished and misshapen fruits and vegetables may not look perfect, but they are still perfectly nutritious and good to eat. Anyone with a garden of their own would laugh at the idea of fruit and veg that are too small, let alone too big, for the standards of coddled supermarket customers.

But between the exploitation of migrant labourers and the wastage of vast quantities of good food, this dysfunctional relationship between consumers and major retailers is no laughing matter. The supermarkets want ever expanding profits for the benefit of their shareholders; their customers want the appearance of quality and convenience at a low price. These two demands are ultimately not reconcilable, without someone – our farmers, our migrant labourers, our poorer neighbours or our natural resources themselves – paying the real price.

Zac Alstin is associate editor of MercatorNet. He also blogs at zacalstin.com



This article is published by Zac Alstin and MercatorNet.com under a Creative Commons licence. You may republish it or translate it free of charge with attribution for non-commercial purposes following these guidelines. If you teach at a university we ask that your department make a donation. Commercial media must contact us for permission and fees. Some articles on this site are published under different terms.

comments powered by Disqus
Follow MercatorNet
Facebook
Twitter
MercatorNet RSS feed
subscribe to newsletter
Sections and Blogs
Harambee
PopCorn
Conjugality
Careful!
Family Edge
Sheila Reports
Reading Matters
Demography Is Destiny
Bioedge
Conniptions
Connecting
Above
Vent
From the Editor
Information
contact us
our ideals
our People
our contributors
Mercator who?
partner sites
audited accounts
donate
advice for writers
privacy policy
New Media Foundation
Level 1, Unit 7,
11 Lord Street,
Botany Australia 2019

editor@mercatornet.com
+61 2 8005 8605
skype: mercatornet

© New Media Foundation