Strip Lights, Endless Queues of Strangers and Shelves of Packets, Fake Smiles from Bored Checkout Assistants - Isn't There a Better Way to Get Our Food?

W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k Strip lights, endless queues of strangers and shelves of packets, fake smiles from bored checkout assistants - isn't there a better way to get our food?

Supermarkets wield immense But the tide may be turning. power over the way we grow, Unease at the true cost of buy and eat our food. They supermarket food is are shaping our environment, spreading among consumers, our health and the way we who are beginning to join interact socially. These forces with the farmers and changes have gone workers who have always unchallenged because known that supermarket consumers have been sucked 'choice' is a bad deal. into superstore lifestyles, persuaded that the This booklet aims to opportunity to help campaigners get select from to grips with the six different reality of brands of supermarket cut-price domination and oven chips argues why we at three in must start the morning looking for represents alternatives. choice and value. Researched and written by Lucy Michaels and the Agriculture Project at Corporate Watch

What’s Wrong With SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k What's Wrong with Supermarkets? Overview: Supermarkets sweep up 2 Contents The supermarkets we know today The falling cost of global 3 Overview: Supermarkets sweep up started in Britain with the Co- transportation has helped operative Movement in the 19th supermarkets source abroad more 10 The Cheap Food 'Mantra' - Stack it high! Sell it low! century. This was a group of cheaply. Getting bigger ensured 11 Encouraging industrial agriculture independent local retailers economies of scale, and going self- - and destroying small farms worldwide controlled by its consumer members, service cut wage bills. The 'weekly 17 A spoonful of organo-phosphates - who sold un-adulterated foods at shop', made necessary due to prices working people could afford. changing work patterns and possible Dangerous chemical usage in food & farming It was in post-war Britain that the through a massive increase in car 17 Bye-bye High Street - The destruction of communities and jobs foundations were laid for the ownership, has also increased 20 Apples from Africa and pears from Peru - supermarket revolution; the 1948 supermarkets’ popularity. Food miles and climate change Agriculture Act initiating the ‘cheap food’ policy that is with us today. During the last three decades, the 23 Oiling the trolley wheels - Undue influence on government With government subsidies to United Kingdom has been 24 The plastic smile - Shop and farm workers rights farmers, new machinery and new transformed from what Napoleon 27 'Rip-Off Britain' - The Competition Commission enquiry chemicals arriving on farms, food described as a 'nation of shop- keepers', with innumerable small 31 'Mummy, mummy, can we buy the Barbie spaghetti shapes?' - production rocketed. businesses, to a supermarket culture promoting unhealthy processed food. The golden age of supermarkets dominated by a handful of large 33 Choice? Convenience? Value? began in 1964, with the abolition of retailers. Their formula for success is 34 And for dessert... What can you do about it? Retail Price Maintenance simple - they operate efficiently, they - the mechanism that provide a one-stop shop and they 38 References had allowed enjoy consumer confidence. Today manufacturers and they wield immense influence over Researched and written by Lucy Printed by Oxford Greenprint on 100% post-consumer suppliers to dictate the way we grow, buy and eat our Michaels and the agriculture recycled paper, using solvent-free inks and renewable their prices. With food. They are shaping our project at Corporate Watch. This energy. (Browse: www.oxfordgreenprint.co.uk) First market liberalisation, landscape, our health and the way project works with Grassroots published in Feb 2002. Reprinted April 2002, Action on Food and Farming March 2003 and April 2004. the supermarkets we interact socially, and these (GAFF) campaigning against the began to dictate changes are going unchallenged corporate control of agriculture. prices back to the because of our fast food lifestyles; Design and back cover by Stig. Corporate Watch suppliers, meanwhile consumers want quick access Front cover & many cartoons by V. 16b Cherwell Street, Oxford, OX4 1BG, UK offering bargains and to a wide choice of goods at Thanks to Michael Hart, Kathryn 'loss leaders' to entice low prices. But, as this Tulip, Judith Whateley, Rebecca Tel: +44 (0)1865 791391 customers. briefing will illustrate, Spencer, Pippa Gallop, Kes and the Email: [email protected] Food and Farming course at such 'choice' has come at a Schumacher College, Devon, price... November 2001. www.corporatewatch.org.uk

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The UK grocery market is controlled Consolidation in the A supermarket In this report, we focus on supermarket by the supermarket multiples, multiples or chains: the corporations that virtually all of which are household ...is a self-service grocery outlet own ten supermarkets or more around food retailing industry that sells food, beverages and the country, as defined in the recent names. The top five are Tesco, In 2002, food sales through other goods. They are located Competition Commission report. We use Sainsbury's, Morrisons (after its supermarkets reached £83.68bn - a on urban high streets or in 'supermarkets' to refer to all three acquisition of Safeway), Asda and growth of 5.1% on the previous year, categories of large grocery store. shopping centres, covering an Somerfield. In addition there are and a growth of 30% since 1995. 2 The Conservative Government tightened area of 4,000 - 25,000 square ‘upmarket’ supermarkets such as Industry analysts Keynote estimate up planning restrictions on out-of-town Waitrose (owned by the John Lewis ft. Over the last 10-15 years, supermarkets in 1993 and 1996 as it that the value of retail sales of food some have developed in out-of- became clear that they were damaging the Partnership) and Marks & Spencer, through supermarkets will grow by town or edge-of-town locations. countryside, town centres and local and smaller or regional operations 16% by 2007. The Institute of Grocery economies, as well as increasing traffic. such as Iceland and Booths. At the Retailing (IGD), on the other hand, This was supported by New Labour who A superstore cheap end are the German bulk predicts a considerable slow down in promised to rejuvenate city centres and discounters, Aldi and Lidl and the 3 ...is a retail outlet specialising tightened up planning restrictions growth over the next few years. in grocery sales, although not including a moratorium on the sale of Danish chain, Netto that stock exclusively, of 25 - 50,000 school playing fields for out-of-town smaller ranges of mainly imported According to the IGD in 2001, the square ft. They are supermarket developments. goods. The Co-op is unique as it major supermarket multiples make usually located As a result, supermarkets ismade up of 38 regional food up 60% of the market, convenience have recolonised the high retailing consumer co-operatives or retailers make up 20%, the smaller out-of-town or on Number of Supermarkets street with a whole new ‘societies’ around the UK. Anyone multiples, independents and the edge of towns. and Superstores 2004 1 breed of convenience can become a member of the Co-op specialists make up 13%, co- They offer a larger stores, many open 24 Somerfield 1277 range of non-food hours, such as Tesco and become involved in the running operatives make up 5% and bulk Tesco 775 4 items, such as DIY Metro and Sainsbury's of the regional society. discounters 2%. Market analysts Safeway 480 Local, as well as petrol and garden Taylor Nelson Sofres, who calculate J. Sainsbury 517 forecourt stores. Stores Convenience stores are not classified market share by measuring shopping products and such as Tesco Express Marks & Spencer 297 as 'supermarkets' as they are smaller habits in 15,000 households, would electrical goods. and Sainbury Central are in floor space and are aimed at ‘top Asda 258 aimed at passers-by and put the figure for the top five much up’ rather than ‘one trip’ shoppers’. A hypermarket Morrisons 119 harried commuters higher at around 75%. looking predominantly These range from independently - ...is a superstore for packaged ready owned cornershops to ‘symbol’ The trend towards consolidation over 50,000 square meals. groups such as Spar and Londis: looks set to continue. In late 2000, ft. These are always out-of- Many have extended existing superstores groups of independent stores analysts suggested that there was not town or on large out-of-town into the storage space no longer needed sharing purchasing, distribution and really room in the sector for all the due to Just in Time delivery methods, or complexes, with extensive car marketing. The 'convenience' sector large retailers. Verdict Research parks. French and US flouted a legal loophole to add mezzanine levels for which planning permission is is rapidly blurring with the predicted that 'Within the next five hypermarkets can be as much not needed. supermarket sector, as the 'Big Four' years, the five major UK grocery as 100,000 square ft. acquire existing chains and build players are likely to be down to three, Source: Keynote Report 2001 alliances. possibly two'. In 2004, this prediction is rapidly coming true.

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The supermarkets are involved in This caught the other supermarkets Analysts cannot underestimate the This was mainly prompted by Wal- fierce battles for market share, sales on the hop as they too had been significance of this development. Mart’s arrival in Europe. The mega- growth and ultimately an increase in eying the ailing Safeway, and led to According to Julian Hunt, editor of merger of French grocery Total Shareholder Return (TSR) further bids by Sainsbury, Asda, The Grocer, UK grocery is on the corporations Carrefour and Tesco, KKR (US venture capitalists) verge of 'seismic change'.6 Promodes in 1999 created a clear Tesco, with the highest market and the Philip Green consortium second place to Wal-Mart in share, has been considered invincible (who also own BHS and Top Shop). In The supermarkets have also moved Carrefour. Carrefour now operates in by some analysts. Datamonitor February 2003, the bids were referred into the convenience sector valued at 32 countries, German Metro in 27 ascribes its success to ‘growing a to the competition authorities to £21bn. This is a growth area as countries and Dutch Ahold in 23 strong UK core and then rapidly judge which would be disallowed on ‘cash- rich, time-poor’ consumers are countries.7 Ahold today generates developing international stores, the grounds that they would take on the rise. The Competition 82% of its turnover outside its home building good non-food sales, that supermarket’s market share over Commission report on Supermarkets country.8 Tesco, the fifth largest expanding into retailing services and the 25% mark which classically helpfully made a clear destinction global grocery retailer,9 has stores in exploiting e-commerce constitutes a monopoly. between the two sectors giving the Ireland, but is mainly focusing on 5 successfully'. green light to potential takeovers. expanding into Central and Eastern Many analysts saw Tesco’s bid as a Tesco has acquired hundreds of Europe. Tesco is the market leader in Sainsbury and Asda have been vying ‘stalling’ tactic on the acquisition’s stores through its acquisitions of Hungary and has 144 stores in Czech for second and thrd position. For a progress as the authorities were very TNS stores (Nite and Day and One Republic, Hungary, Poland and time it was a close call, but internal unlikely to have permitted a Tesco Stop) and Administore (Europa, Slovakia. Tesco has also expanded problems and strategic errors have takeover. In September 2003, the OFT Harts and Cullens). A variety of into the Far East, with the Tesco left Sainsbury struggling. Sainsbury ruled that Morrisons was the only groups is now calling for a Lotus brand name. believed it could abandon the classic grocery retailer it would permit to moratorium on more convenience- focus on ‘price’ in favour of make a bid, but it was March 2004 store acquisitions by supermarkets Wal-Mart, with global sales of refurbishing store fascias and supply before the £3bn deal finally went to try to halt the ‘Tescoisation’ of $244.5bn in 2002, is the retail chain improvements. Its loss of through. This immediately sparked a Britain. What is certain about these equivalent of a superpower. market share against Asda illustrates ferocious price war as the other recent acquisitions is that the writing According to Fortune magazine, in that price is still the key for supermarkets sized up the new is on the wall for the traditional 2002 Walmart’s profits exceeded consumers. opposition. independent cornershop who simply Exxon Mobil’s to make it the biggest cannot compete on price and range. company in the world.10 With planning regulation difficulties making the % Market Share of the Top Grocery Multiples Tesco and Marks & Spencer have The only obstacle to global opening of new stores less sought new markets overseas consolidation will be institutional appealing, the major 1998 1999 2000 2001 Sept ‘03 following the other major European constraints such as government supermarkets are finding that Tesco 22.9 23.4 24.2 22.8 26 and US retailers. regulation of retail and service Sainsbury's 19.8 19.1 18.6 15.8 16.2 gobbling their rivals is the activity and restrictions on land use. most effective way to Asda 14.1 14.8 16.3 12.4 17 increase market share. In Safeway 10.2 10.0 10.1 9.3 10 Morrisons 6 January 2003, Morrisons For in-depth profiles of major UK supermarkets, see the Corporate Watch web-site: announced its intention to Source: ‘Till Roll Share of Trade’ as calculated by retail analysts Taylor Nelson Sofres Superpanel. Various sources. wwwcorporatewatch.org.uk/profiles acquire Safeway.

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This has led to major supermarket Parallel or 'grey' imports are another An increasing amount of processed During summer 2001, Asda hired chains pushing their governments growth area, with supermarkets organic food and fairtrade products trained actors to work as store towards global deregulation. All eyes importing designer goods direct from are finding their way onto the greeters,18 in a bizarre full circle are now on the General Agreement factories outside the EU - rather than shelves. These products give the which has seen shopping move away on Trade and Services (GATS) through authorised wholesalers - thus impression of a caring, sharing from the genuinely personal service agreement, a WTO agreement that is undercutting authorised retailers. In a company and are a major growth of many small stores, through the intended to realise further recent court case Levi Strauss area. Supermarkets see them as an impersonal experience of liberalisation in the retail sector. 11 successfully preventing Tesco selling expensive niche market and evidence superstores, and back to a cheesy Levi jeans at cut price.14 shows that they have exploited fake version of personal service customer goodwill by overcharging again. This time, however, the In-store strategies The increase in the number of people for fairtrade products.16 experience is carefully orchestrated 'eating out' is a challenge to the by 'customer relationship to woo customers supermarkets. They have responded by Organic enthusiasts question management' to make the customers Since 1995, the increasing prepared whether the corporate appropriation feel like more than the sum of their strategies used by foods, especially of the organic sector, including intimate shopping records, collected major chains to luxury own-brand importing cheaper products and from loyalty cards. increase custom ready meals. Some bankrupting small-scale UK farmers, have varied from supermarkets are is true to the original social and intense price developing in-store environmental aims of the competition to juice and sushi bars. movement. loyalty schemes, as Sainsbury now has well as constant in- Starbucks coffee In September 2001, tesco.com store innovation on outlets in some announced it was on the verge of In November 2001, Sainsbury's products. stores. profitability. At the start of 2004, released a story about lovers found Tesco became the biggest online kissing beside a chiller cabinet.19 In Wal-Mart's entry into The effect on grocer worldwide, with sales of other supermarkets, there are 17 the UK through its specialist retailers and £500m worldwide. Many shoppers, reputed to be 'singles nights'. As acquisition of Asda dictated new restaurants will be dramatic, as the however, are still unconvinced by Marketing Online reveals, this is a strategies. The Wal-Mart formula is supermarkets will be able to out-price internet shopping. concerted PR strategy to make based on low prices, ‘retailtainment’ them. Pharmacies, dry cleaners and supermarkets sexy and combat the To challenge home shopping, [sic!] and selling non-food products. post offices are beginning to appear in alienation that shoppers retailers are improving the 'in-store' superstores, further shrinking the role undoubtedly feel among the strip Wal-Mart's profits are five times experience, promoting shopping as of the high street. Supermarkets have lights and endless aisles, higher in non-food sales than food an enjoyable leisure experience. also entered service areas such as overwhelmed by strangers and sales.12 Retail analysts Verdict say From Asda's in-store chaplains and insurance, banking, internet service shelves stacked high with that a massive £14.5bn was spent on MP's surgeries to nail-polishing and provision and soon even divorce products.20 non-food items in supermarkets in finalising and will-writing.15 pizza spinning, ‘retailtainment’ is 2000 and that it is a potential growth fast becoming part of the area, especially for Asda and supermarket shopping experience. Tesco.13

8 9 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k The Cheap Food Mantra Encouraging industrial agriculture 21 and destroying small farms world wide “Stack it High, Sell it Low!” To provide customers with the huge 'Since December our prices have fallen by up to 10p per pound at a variety of inexpensive food that they As a prelude to this critique But supermarkets are not a good time when they should normally be promise, supermarkets ruthlessly of supermarkets, we must deal for the consumer. While certain going up. The industry could end up exploit their effective monopoly as the dumping thousands of tonnes of the acknowledge that they have key items, such as bread and milk, biggest buyers of food. They can best UK apple crop we have seen for dictate how, where, when and for how achieved an awesome and are cheap, this is because many years. The main reason for much their food is produced, audacious feat of logistics. supermarkets use them as 'loss this problem is a lack of shelf space leaders' to entice the customer in allocated to us by our supermarkets. packaged, stored and delivered. This They have created for themselves a with the impression that the whole Cheap imports from overseas have is monitored by a sophisticated system not helped the situation. If the major supply chain that moves with store is cheap. Bread and milk are of specifications and tight managerial supermarkets continue to force control, including direct contracts wth synchronicity and efficiency to ‘Known Value Items’ (KVIs). prices down in this way, the UK transport millions of tonnes of Customers will find that products won't have a top fruit industry in ten selected farmers rather than 'cheap food' onto the shelves each they are less familiar with the price years time, and all our orchards will traditional competitive markets and day (known in the jargon as of can often be obtained more be grubbed up.' the use of favoured slaughterhouses, 'Efficient Consumer cheaply in local independent processing and packing companies. Martin Harrell, an apple grower Response'), and to make shops. This is especially Producers are merely assembly-line from Gloucestershire a healthy profit for We can't true of fresh fruit and workers producing standardised products, designed by technicians. themselves and their let the supermarkets vegetables. But more 'Having just restocked after foot and shareholders. than this, the 'cheap mouth, I find that liquid milk prices Supermarkets employ researchers to get away with blaming food' that the are falling and are now below my production costs. My buyers are discover precisely what the average What is the truth consumers for demanding supermarkets peddle being squeezed by the supermarkets cost of production is for a particular behind cheap food? 'cheap food' when it is also comes at a very which sell liquid milk at below crop worldwide, then conduct blind Supermarkets claim high price to acceptable levels to attract essentially only they auctions over the internet, buying only that this is what the taxpayers, small customers. I am being asked to run a who benefit. when the price has fallen to the lowest consumer wants, and a manufacturers, small business at a loss. I have done all I can to become efficient and meet level. Farmers do not know what price survey by the Food farmers and the high welfare and farming standards. has been tendered by other producers Standards Agency in environment. We deserve But unless I get a fair deal from the and this forces them to offer their September 2001 supports this. It affordable food, yes, but also healthy supermarkets I will not be able to produce at a low price to ensure a sale. showed that 46% of respondents food, healthy communities, healthy continue. The issue of fair trading Producers of perishable foods are reported price as the key small businesses and a healthy must be urgently addressed.' especially vulnerable. Only determinant for choosing their food; countryside. We can't let the Gareth Watkins, dairy farmer multinational food corporations and 18% chose taste, 17% chose quality, supermarkets get away with blaming 22 companies with successful brands and only 12% put health first. consumers for demanding 'cheap Friends of the Earth press release have any leverage with the big food' when it is essentially only they 'Supermarket power threatens farmers' 26/1/02. suppliers. who benefit.

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The Competition Commission Report One farmer selling cauliflowers to a It costs a small dairy farmer The supermarkets and big processors on Supermarkets (2000) cited 30 supermarket had his entire crop anything from 18p to 22p to produce are increasing their share of the alleged exploitative supermarket rejected due to excessive quality a litre of milk. Until the Milk profit margin by squeezing the whole practices over suppliers, including not standards. He initially asked the Marketing Board was abolished in supply chain, and the farmers at the paying suppliers on time, changing supermarket in question whether 1994, they were being paid 24p per end of the chain are in the weakest specifications at the last minute on he could use a pesticide to litre. Farmers are currently being position. Agricultural subsidies quality, quantity and packaging and eliminate caterpillars, and they had paid 19p per litre, for what sells in essentially go straight into charging suppliers for supermarket refused. He successfully eliminated the supermarket for 72p.25 In some supermarket profits. errors. At the heart of this is the them using a bio-pest control, the sectors (arable, sheep and beef), the supermarkets' refusal to enter into Encarsia wasp. This caused no difference is made up by the These are clear examples of the binding contractual agreements with damage to the cauliflower, although taxpayer through subsidies. While supermarkets exploiting their suppliers, thus leaving them with no it left the occasional dead wasps to farmers are often blamed in the monopoly position. Farmers and redress against supermarket be easily be washed off by the media for being 'subsidy junkies' the even the bigger food manufacturers exploitation. consumer. The supermarket in truth is that in some cases the farm and processors are reliant on a few question, however, refused the gate price is so low, that even with retailers and thus vulnerable to All of the supermarkets admitted to cauliflowers anyway.24 the subsidy, farmers cannot cover exploitation. The Competition the Competition Commission that their costs. Commission found that as a result they requested suppliers' to make a The Commission report is full of suppliers were not able to innovate payment for better positioning of testimonies from farmers and other and develop new markets and were products in stores', and demanded suppliers about their treatment by Down on the farm living in fear of being arbitrarily de- 'non-cost related payments': i.e. the supermarkets. You may wonder In 1939, Britain had half a million listed. See section on ‘Rip-off Britain’. farms, most less than 100 acres and payments to ensure the continuation why you hadn't heard about this worked by around 15% of the When confronted over this blatant of business. These are sometimes shocking exploitation before: most population. Britain today has lost over exploitation, supermarkets cast the charged retrospectively. They are too afraid to raise their voices a third of its farms and the agricultural blame elsewhere. Either, ‘it's the free admitted 'to imposing charges and as they are at risk of being workforce is in serious decline. Less market and we can import milk more than 2% of the UK workforce is making changes to agreements blacklisted by supermarket buyers. 26 cheaply from Eastern Europe or New currently engaged in farming, and 30 without adequate notice; and These buyers are regularly switched the government predicts that by 2006, Zealand.’ Or, ‘we'd like to pay you unreasonably transferring risks to the between product ranges making it 25% of the remaining farms in the UK properly, but the WTO will clamp supplier'.23 Farmers are forced to hard for suppliers to build up a will have gone out of business or down on us for price-fixing’ - i.e. invest a huge amount into meeting personal relationship. merged, with a further 50,000 people paying a fair price.31 Or, ‘it's the 27 supermarket needs, and then can be forced to leave farming. The average middlemen creaming off all the One of the most shocking forms of farm income in 2002/3 was £12,500 dropped at a whim, wiping out their although incomes for some, profits, not us’. Or, ‘the quality of UK exploitation is that farmers are 32 entire business and the businesses predominantly small farmers, remain milk isn't up to it’. and rural communities that rely on frequently paid less than the cost of below the minimum wage.28 them. It's the same story across the production for their goods. The UK Fifty years ago, farmers in Europe and The truth is that our global economic globe as farmers around the world are dairy industry, for example, has North America received 45-60% per cent system may well be at fault, but it is forced to compete with each other to been heavily hit by supermarkets of the money that consumers spent on the supermarkets, through lobbying food. Today, that proportion has produce a better quality product, who have used the oversupply of governments and the WTO, who have milk to their own advantage. dropped dramatically to just 7% in the manipulated the system to suit them, more ‘efficiently’ at the price the UK and 3.5% in the USA, but remains at supermarket demands. 18% in France.29 with total disregard for the little guy.

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As for laying the blame at the feet of To achieve the blemish-free perfect The big players in US food the 'middlemen', there are seven 7.4 inch carrot, pesticides, fertilizers Would you like ground production; Iowa Beef Processors large processors in the dairy and factory farming are necessary. spinal cord with that, Sir?34 and Cargill (beef), Smithfield and industry, and, although not Up to 40% of a perfectly good • Some 750 million battery chickens are Premium Standard Farms (pork) and blameless, they were also affected by product will be discarded to meet produced for consumption each year in Tyson and Perdue (chicken) all have the drop in the price paid for milk by the cosmetic perfection apparently the United Kingdom. Intensively raised fairly similar production methods. chickens grow so quickly that they the supermarkets. demanded by UK consumers, and cannot support their own weight. Huge feedlots are sited in states taste is undoubtedly sacrificed. It is According to the Agriculture and Food where regulations are lenient, often Farmers are in an extremely weak not surprising that most food Research Council, more than half have in poor communities where people negotiating position. They used to manufacturers support the logical developed serious bone defects by the are less likely to object to the stench age of six weeks. have some bargaining power on the conclusion of uniform food: genetic of excrement and pollution. basis of seasonality, but imports and • One hamburger can contain meat from engineering. dozens or even hundreds of different glasshouses have destroyed this cattle. Until August 1997, 75 per cent of Processors may cut costs through advantage. Now farmers are Intensive cattle in the US were fed the remains of mass production and using waste squeezed by a limited number of farming in dead sheep, cattle, and even on occasion products from the food industry buyers, big suppliers and global the UK has the corpses of cats and dogs purchased such as maize starch, sugar beet from animal shelters. Even with new oversupply. not reached regulations, the US Food and Drug fibre and whey powder, but their the Administration allows dead pigs, horses cost is hugely increased through To make a living, farmers have proportions and poultry to be included in cattle packaging, transportation and adopted more intensive methods to of the USA, feed. Poultry can also be fed dead cattle. presentation. For example, Northern produce more to sell, and have where the • In his shocking best-seller, 'Fast Food Foods' Dalepak lamb grills cost £8.45 invested their savings. This may Nation', Eric Schlosser reveals how corporate difficult it is to make sure that meat a kilo; almost twice the price of make sense on an individual level, control of destined for consumption as fast food genuine lamb chops from a local but ultimately works against their agriculture is (whether sold through restaurants or for butcher.35 It seems that consumers interests, creating over-production most keenly home cooking) is not contaminated in are happy to believe the hype: that and a further decrease in prices. the slaughterhouse. Cattle hides are felt in the www.subvertise.org pulled off by machine, and if the they are getting the best deal with food machine has not been cleaned properly, the 'convenience' of processed foods Farmers on the Continent have processing and manufacturing dirt and manure can fall into the meat - and shopping in supermarkets. formed co-operatives so that with and end up in your lunch. sector. There 70 million of acres are more to sell they can demand a planted with GM crops and most • Schlosser also explains how the better price. It is ironic that the stomachs and intestines are pulled out The Cheap Food Myth meat is produced in feedlots or Competition Commission broke up by hand. If this is not performed exactly Cheap food is a myth. The consumer CAFO's (Confined Animal Feeding right, the animal's innards spill the large UK dairy farmers co- really pays three times: once in the Operations). everywhere. Some slaughterhouses have operative, Milk Marque, in 1999 gut contents spilling out of one in five shop, a second time in taxes through whilst allowing the supermarkets to With the immense pressure from the carcasses on the production line. direct subsidies to farmers, and continue with their monopoly. Processing plants can produce finally indirectly in taxes cleaning up supermarkets down the food chain, 800,000lb of hamburger a day. If only it is likely that we will see a similar the mess left by industrial To make a profit, the supermarkets one of the animals involved is infected model emerging here in processing, with E.coli 0157: H7 (a major cause of agriculture and subsidising the and processors prefer to deal in bulk manufacturing and agriculture. food poisoning), it means that 32,000lb transport infrastructure. with a standardised product. of ground beef could also be contaminated.

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It has, for example, cost the Further liberalisation of agricultural government over a billion pounds to markets through the Agreement on A spoonful of organo-phosphates... install the equipment necessary to Agriculture, part of the World Trade Dangerous chemical usage in food and farming remove nitrates and pesticides from Organisation, will mean that our our water.36 cheap food will continue to be Some pesticides used in the UK Environmental groups believe that the subsidised by environmental and today are, in excessive doses, supermarkets should do more to The consumer also pays the price in social destruction, as well as animal carcinogenic, hormone disrupting reduce pesticide use. The codes of ill health and increased risk of exploitation in poorer countries, as and cause damage to the nervous practice they set up with farmers disease. The drive for cheap food well as in the UK. Opening up system. Many pesticides are should aim for a significant reduction has been behind every major food markets to 'developing countries' persistent organic pollutants in pesticide use and zero residues of catastrophe of the past decade. will not benefit poor plantation (POPs) which means that they pesticides in food. Friends of the Earth Feeding ground-up animals to cattle workers, rather the multinational persist in the environment and in March 2004, found that whilst Marks - who are natural herbivores - as a corporations who own the are not broken down There are & Spencer and the Co-op were on the cheap source of infrastructure numerous incidences of farm- right track banning 50-60 pesticides protein is by which food workers and others being from its suppliers globally and aiming generally is transported poisoned by pesticides. There is for zero residues, others were seriously recognised as around the also evidence of corporate failing on this issue. In particular the initial world, such as irresponsibility in the Morrisons failed to reply to FoE’s cause of BSE. international manufacture and labelling of survey, and have no stated policy on 39 Salmonella is grain traders, pesticides. the issue.40 endemic in Cargill and chickens ADM, who 'Supermarkets and their control are a dagger in the eggs 80% of the Bye-bye High Street guts of civilisation... because the world's grain The destruction of communities and jobs Shoplifting is a badly broiler system trade. delivers cheaper Supermarkets have become all powerful by needed re-allocation of poultry products. E. coli is a by- The current pattern of supermarket putting smaller retailers out of business. resources. I don't regard product of intensive livestock consolidation will not help matters. it as stealing.' practices. Infectious Salmon At a recent seminar held by The In their Ghost Town Britain reports Controversial views of Anaemia virus (ISA) is exacerbated Grocer, ex-CEO of Somerfield, David (2003), the New Economics John Papworth, by applying the broiler system to Simon, claimed that the proposed Foundation (NEF) revealed that priest, 1997 37 fish. takeover of Safeway will be a 'killing between 1995 and 2000 we lost ground' for weak brand and private roughly one fifth of our local shops The costs of BSE and foot-and-mouth label suppliers, and hence the and services including post-offices, In 1960, small independent retailers disease could well average £4 billion farmers who supply them. They will banks, butchers and grocers. had a 60% share of the food retail each. Then there are the costs of our face crippling reductions in margins Furthermore, over the five years to market. By 2000, their share was unhealthy diets to the NHS (see and the possibility of losing their 2002, around 50 specialist stores reduced to 6% while the multiples’ 'Selling unhealthy food' section). 38 entire business. closed every week.41 share increased to 88%.42

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With our high streets disappearing and our town centres shrinking, we A study of the job dividend Can you walk to your local grocery store? are losing a focal point for through localized food was conducted by the New community life and a place for The siting of supermarkets 'out-of- It also causes 'food deserts': areas Economics Foundation. meaningful interaction between town', has led to a massive dependence where, without a car, there is very little on car use for shopping: the distance choice of reasonably priced or healthy people of different classes, cultures, This found that £10 spent on a travelled to shops increased by 60% food. ages and lifestyles. According to local organic box scheme in between 1975 and 1990. Today three 'Off Our Trolleys' (See ‘Further Reading’) 43 Caroline Lucas MEP, half the nation Cornwall generates £25 for the quarters of supermarket customers illustrates that a typical out-of-town 48 now shops in 1000 giant superstores. local economy (a radius of 24 travel by car , and food shopping superstore causes £25,000-worth of 49 km from the farm), compared accounts for 5% of all car use. This congestion, pollution and associated Most obviously, independent stores with £14 if spent in a has inevitably led to an increase in damage to the local community every close because the ‘under one roof’ supermarket.46 traffic. week. format of the superstores seems to offer more choice and makes Money spent in a supermarket is Only serious measures to clamp shopping ‘more convenient’, as do Superstores are designed so that the spirited away to shareholders and down on persistent below-cost free car-parking and free buses. They individual employee can shift the management staff, rather than selling or ‘loss leaders’ can halt this. also appear to be better value maximum number of products per staying in the community where it France, Germany, Ireland and Spain because of below-cost pricing of customer visit. Asda has the highest has been spent, supporting local already have legislation to prohibit certain goods. Many supermarkets level of sales per employee, at businesses and their suppliers. the selling of goods below the price 44 have also mimicked the idea of £104,490pa. compared to Tesco - paid by the retailer to the farmer. independent deli-style food counters £91,591, Sainsbury - £85,986 and With no strong attachment to place, with ‘expert’ sales people. This, Safeway - £94,897. the supermarkets can easily use job In 2000, Wal-Mart was found guilty however, can in no way replicate the cuts as a safety net for ensuring of breaking German law by selling a There are a number of reports sense of community created by the profits - unskilled labour is fairly range of grocery items at below their illustrating the effect of high street nor the level, range and dispensable. Whilst both Sainsbury cost price. The world's largest supermarkets on local jobs. These quality of employment. and Asda have claimed that they will retailer was ordered to halt the are discussed in the Competition create 10,000 jobs each during 2002, practice immediately, or face a fine Beep beep beep. A job in an Commission report (2001). While supermarkets also close unprofitable of up to DM1 million (£308,000). independent store is qualitatively some claim that the number of jobs stores to protect different to one in a supermarket. At increases, the British Retail Planning profits.47 Retail analysts believe the major supermarkets you may be Forum (1998), embarrassingly introducing such a ‘colleague’ or an ‘associate’, but you financed by the supermarkets Below cost selling on the measures into the UK have to conform to the corporate themselves, discovered that every High Street. may well help slow down ‘house style’ - dress and behaviour time a large supermarket opens, on Supermarkets have overseen the the decline of the high street. It 45 codes as dictated from HQ. Despite average, 276 jobs are lost. It near eradication of small-scale would particularly affect Tesco and ‘employee of the month’ schemes etc, found that there is 'strong evidence retailing entrepreneurs. Those who Asda who rely on loss leaders and the corporation is not interested in that new out-of-centre superstores survive live in fear of supermarket aggressive pricing policies to draw you as an individual but as a money have a negative net impact on retail special offers promoting goods consumers in. One anonymous chief making machine. employment up to 15km away'. cheaper than an independent retailer executive of a leading UK retailer has can buy from a wholesaler. admitted that such legislation could cause them 'immense harm'.

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Supermarket cheap food policies Furthermore, the closure of small Apples from Africa, pears from Peru disadvantage local producers because abattoirs as a result of the UK they cannot compete with produce government's over-stringent Food miles and climate change from countries where land or labour interpretation of international health costs less. Long distance and safety regulations has Despite 'locally-produced food' This is because supermarkets transportation of food also produces encouraged long journeys for live being the latest are designed with vast amounts of pollution, requires animals. Whilst this has indeed supermarket buzzwords, ...in centralised distribution in 1997, 126 excessive packaging and use of improved conditions in abattoirs, finding local food in mind and stores simply million litres of chemical preservatives, uses up large these regulations have caused many supermarkets is liquid milk was do not have the amounts of non-renewable fossil small independent abattoirs to close, unusual. Even if it is imported into the UK at infrastructure to fuels (aviation fuel and diesel) and as the cost of upgrading is labelled 'local', it is still the same time as 270 purchase and sell million litres was thus contributes significantly (and prohibitive. Journeys of 200-400 likely to have travelled locally. Industrially 50 exported out of needlessly) to climate change. miles to slaughter are not unusual the length and breadth of produced food covers an the UK. There are also huge animal welfare for animals today; the average the country before reaching excessive number of miles and disease control implications from journey from farm to abattoir has the nearest supermarket to the before it reaches the shelves. the transportation of live animals. been estimated at 100 miles.54 Also, place where it was produced. The Trans-European Network (TEN) is supermarkets regularly make a a massive road and rail infrastructure premium selling 'Scotch beef' and A traditional Sunday lunch could easily have travelled 25,000 miles if a chicken project, subsidised by the EU, that 'Welsh lamb' despite the fact that from Thailand and fresh vegetables from Africa are included in a supermarket essentially facilitates the export of animals may have only been shopping basket. A recent report from Sustain called 'Eating Oil' highlighted the cheap food and manufactured items transported across the country and trend for supermarkets to source food from overseas that could well be grown in from Eastern Europe. The UK pastured in Scotland or Wales for the UK. In Britain, the distance food is transported increased 50 per cent between Government also encourages food just two weeks.55 This is the reason 1978 and 1999. miles. Artificially low fuel costs, why, despite a recent Friends of the Chicken from Thailand 10,691 miles by ship especially tax-free aviation fuel, mean Earth survey revealing that 84% of Runner Beans from Zambia 4912 miles by plane we are importing food we could consumers want to buy UK fresh Carrots from Spain 1000 miles by lorry easily grow ourselves. According to produce in season, the supermarkets Mange tout from Zimbabwe 5130 miles by plane DEFRA figures, the UK is 62.5% self- are not delivering.56 Another Friends sufficient in all food (down from 75% of the Earth survey found that at the Potatoes from Italy 1521 miles by lorry in 1991).51 UK air freight (imports height of the UK apple season under Sprouts from Britain 125 miles by lorry and exports) is growing by about 7% a half of the apples on offer in the big Transport of imported goods from port of entry to distribution centre: 625 miles. year and is expected to increase at a four supermarkets were home- Transport from distribution centres to supermarket: 360 miles. rate of 7.5% a year to 2010.52 Long grown.57 Whatever concerns Total 26,234 miles distance transportation of food leads supermarkets say they have over to the crazy situation where in 1997, 'food miles' and climate change can However, choosing seasonal products and purchasing them locally at a farmers' 126 million litres of liquid milk was surely be discounted when Sainsbury market, for instance, could reduce the total distance to 376 miles, 1/66th of the imported into the UK at the same and Tesco offer British Airways Air distance of the meal above. time as 270 million litres was Miles as part of their loyalty Source: Eating Oil: Food in a changing climate (2001) published by Sustain exported out of the UK.53 scheme.58

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All food sold in supermarkets is transported, by suppliers or It’s a wrap supermarket trucks, to regional One-third of the 25 million tonnes of Oiling the trolley wheels - waste produced in Britain in 1997 distribution centres (RDCs) around was packaging. The packaging the country before being distributed industry contributes 5% of the UK's Undue influence on government to supermarkets. Sainsbury, for total energy consumption, causes example, has only 12 depots for considerable pollution, and puts yet The food industry is · Archie Norman, chilled goods. Supermarkets work on more strain on the country's landfill not short of friends former chief exec of sites when packaging is disposed of; the principle of 'Just In Time' in high places to Asda, is currently only 5% of packaging is currently delivery with products rushed to make sure its voice is Tory MP for recycled. The average household heard more clearly Tunbridge Wells. He superstores as and when they are spends £470 per year on packaging - needed. According to the ‘Eating Oil’ almost a sixth of food than those of the was a key advisor to 59 report, the food system accounts for expenditure. Disposable packaging people it puts out of William Hague and a is subsidised: the collection, landfill up to 40% of all UK road freight. business. member of the and pollution costs are borne by the shadow cabinet. taxpayer. Supermarkets have As storage is expensive, the · Sir Terry Leahy, persistently lobbied against supermarkets persuade farms and chief executive of · The outspoken Lord returnable packaging as too labour Tesco, sits on four manufacturers to store produce on intensive, refusing to stock it.60 Haskins is the most their behalf leading to refrigerated government task influential food juggernauts visiting farms daily forces. Lord industrialist. Former Like many retailers and processors, collecting just a few pallets of Sainsbury, although chairman of Northern all the major corporate agri- produce. These trucks thus become officially no longer Foods and Express businesses and retailers continue to 'warehouses on wheels'. employed by J. Dairies, supermarket use refrigeration machinery and Supermarkets claim that a more Sainsbury Plc, is now suppliers and the coolant materials, which use massive centralised system means more Minister for Science UK's largest volumes of CFC and HFC chemicals. efficient transportation, with fewer and Innovation and a processed food and These are both potent ozone ‘May Day’ by lorries delivering major donor to the liquid milk depletors. Clive Ardagh to supermarkets. Labour Party. processors, Refrigeration However, this respectively, he also systems also use · Corporate interests does not has the ear of Tony Blair. He vast amounts of were well represented on the acknowledge that sits on various government electricity and Policy Commission for Food lorries carrying task-forces and is rural therefore and Farming set up by the produce from farms must travel recovery co-ordinator for areas contribute to the burning of fossil Government to decide the further to the RDCs. affected by Foot and Mouth fuels and global warming. future of farming in Britain. disease. Supermarkets are also increasingly These include Iain Ferguson of As well as being environmentally telling farmers to deliver the goods Tate & Lyle Plc (formerly . Tesco and Asda sponsored unsustainable, our reliance on fossil themselves to the RDCs thereby Unilever) and Sir Peter Davies fringe meetings at the Labour fuels makes the UK vulnerable to passing another cost on to the of J. Sainsbury. Party conference in 2003. food and fuel crises. suppliers.

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Trade Union researcher, Don Pollard Although flexible hours often suit The plastic smile Shop & farm workers' rights informally estimates that there are employees such as mothers and 100,000 'gang-workers' working on students, the system is not without 'The reality is, cheap food tends to mean cheap labour and we need to start farms and in pack houses in the UK. its problems. Staff can find their thinking a lot more about this as we encourage supermarkets to vie with each Of these, around 30,000 could be hours altered arbitrarily by managers other over price wars.' Prof. Tim Lang, Thames Valley University 61 illegal immigrants. Despite years of to cover busy periods or staff campaigning by trade unions, shortages. Its no wonder that staff gangmasters are still unregulated turnover on the shopfloor at the A Panorama documentary screened English, they have no means of and free to abuse British and major grocery chains averages 26% a in June 2000 exposed just how redress and end up trapped in a immigrant farm workers at will. Such year. Retailers complain that because vulnerable migrant workers are to cycle of work and low pay at the exploitation of undocumented of the nature of the job they are 62 exploitation by gangmasters. hands of the gangmasters. migrants has occured for years in often forced to employ staff who Gangmasters, who act as an informal the USA and across Europe. lack the skills they require. MP’s from the Environment, Food employment agency, hire casual ‘Dedication, enthusiasm and and Rural Affairs Select Committee labour to work on industrial farms, motivation were among the (2003) were damning of the Shop-workers' rights in packhouses and canning factories, attributes seen as lacking in supermarkets, stating, The major supermarkets employ to produce much of the food that shopfloor staff’.65 around three-quarters of a million ends up on supermarket shelves. The “We are convinced that the dominant film illustrates how migrant workers position of supermarkets in relation to people in the UK. Over two thirds of When the Sunday Trading Act from Eastern Europe are housed in their suppliers is a significant employees in food retailing are part- became law in 1994 there was damp accommodation, moved contributory factor in creating an time, the majority are women, and protection for those who didn't want environment where illegal activities by around so they cannot make friends many are students and temporary or to work Sundays. That right is being gangmasters can take root. Intense agency workers. or learn English and are unable to price competition and short timescales removed for all new starters as many return home as they are indebted to between orders and deliveries put great have Sunday only contracts or Most retail checkout operators (84% the gangmasters who pay them next pressure on suppliers who have little contracts that stipulate Sunday as women) fall in the bottom ten to nothing. As many have come into opportunity or incentive to check the one of the possible working days. legality of the labour which helps them percent of non-manual occupations the UK illegally and speak poor meet these orders.” with average earnings of £184.70 a Formerly, in order to entice workers week. A significant percentage do to work weekends overtime premium not earn enough to pay NI Union representation at Supermarkets 63 • At Sainsbury (174,000 employees) and payments were made, usually at the Safeway (92,000 employees), unions only contributions and are thus excluded rate of up to ‘time and a half’ for • All the major supermarkets have rights for consultation or individual from pensions and other Saturday and double time for recognise unions except Marks and representation. .64 contribution based benefits Sundays. At the time of the Act, Spencer, which is strongly unionised • At Tesco, the largest UK employer, USDAW met with the major retailers in Belgium and France, and John with 221,000 employees (2003), the Most retail companies use a starter Lewis, who own Waitrose. in the Shopping Hours Reform shop-worker's union, USDAW, has full rate for new employees whilst they John Lewis, however, is a recognition rights. USDAW represents Council where a 'gentleman's undergo 'training', so with the high partnership, run on the principle of 188,350 supermarket employees agreement' was made to protect turn-over rate amongst students and 'worker's co-ownership' in which including 100, 000 at Tesco. weekend premiums.69 According to every employee is a partner and the minimum wage not applying for . The GMB has sole union rights at Asda USDAW weekend premiums have owns the company. (117,000 employees) under 18 year olds, they can get now disappeared. away with extremely low pay.

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Wal-Mart is famously anti-union and · The Federation of Bakers claimed practices the hiring of part-time, 'Rip-off Britain' - The that by selling loaves for as little as temporary and casual labour to try Competition Commission enquiry 17p, the chains were making massive to get around employment In 1998, government ministers losses, but doing small bakers out of legislation, usually dismissing turned on the supermarkets, echoing business. workers before they are entitled to a public perception that consumers · The Commission received claim redundancy and unfair in the UK were being 'ripped-off'. 66 complaints from both sides - some dismissal. Wal-Mart is also This was partly due to the claiming that the supermarkets renowned for putting pressure on its perception that European charged too much, ripping off suppliers to reduce costs which supermarkets are cheaper and partly consumers, and others that they invariably leads to cuts in jobs, because of the evident disparity charged too little, driving smaller wages and working conditions. between farm gate and retail prices. rivals into the ground. Why, it was asked, were potato Suppliers are encouraged to source farmers losing between £17 and £27 from free-trade zones with no labour Despite listing 52 practices that on every ton of potatoes they take protection and where underage illustrated a complex monopoly out of the ground?71 Why is there a labour can be exploited. A recent situation, and concluding that 27 of mark up of as much as 198% on Oxfam report showed that the other these practices work against the apples and 439% on eggs in some UK supermarkets are equally public interest, the report amazingly superstores?72 Many supermarkets have been guilty.67 gave the supermarkets a clean bill of health. It concluded that they do not looking at ways to cut back on the In April 1999, the government Wal-Mart is also facing the largest hold a monopoly in grocery retailing need for the check-out till. Asda has launched a £20 million enquiry employment discrimination class and that they do not charge more been working on technology to scan through the Competition action in American history, after than their European counterparts, the whole trolley at once using radio Commission of the Department of being charged with discriminating taking into account exchange rate tagging. Safeway has also pioneered Trade and Industry (DTI). customers using hand-held against female employees in pay, differences and the high value of the scanners.70 Tesco has trialed RFID promotion and training, and with The 16-month enquiry received pound. tags to local protests. These retaliating against women workers thousands of submissions Critics claim that the Commission technological changes would who complained about the alleged highlighting the overwhelming was asking the wrong questions. ultimately reduce the number of jobs abuse. This involves all 700,000 power of big retailers. These amount Whilst nationally none of the for shop-workers. women who worked for the company to three volumes, over 1100 pages. from 1996-2001. supermarkets have a monopoly Many feared the potential impact on · Lutterworth and District Dairy (classically defined by having more labour rights of Wal-Mart's entry into GMB representatives have found that wrote that it was seeing the most than 25% of the market share), they the UK market. In the US, Wal-Mart’s since the merger with Wal-Mart, Asda alarming changes in its 100-year have been found to have extensive wages are well below the American has undermined the union’s position history due to the fierce activities of local monopolies (see section 4). average for the industry with many by not inviting them to the induction the multiples in undercutting of their employees able to claim the of new recruits and not making doorstep milkmen. equivalent of UK income support. membership information widely available to employees.68

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This means that there isn't a genuine This came up for review in March 2003, This was despite the finding that by recommended that new planning local market to keep the price down. by which time only one supplier, Express undercutting small grocers and putting legislation was required to generate Many also felt that the Commission Dairies, had complained to the OFT, after them out of business, supermarkets also competition and to give consumers more Safeway dropped from three to two milk restrict choice for vulnerable consumers, choice. should also have investigated the suppliers. Express were supplying 15% of such as the disabled, people on low It proposed that in areas where social, environmental and health Safeway's milk. However, it was decided incomes and the elderly with no cars. supermarkets were already strong, they effects of supermarkets, which are that Express was not eligible as the should be required to obtain approval for 4) There is limited choice of also surely in the consumers contract with Safeway was signed before new stores over 1000sq metres (around supermarkets in some areas. interest, not just price. Others argue the Code came into practice. 10,800sq ft) from the Office of Fair that whilst no one supermarket has a After taking a year to review the failings The Report found that in some places the Trading. The Commission was also of the Code, something that was surely concerned that certain chains are stifling monopoly over grocery retailing in giants have massive market shares: over very self-evident, the OFT decided that all fifty per cent for Tesco in Uxbridge, competition by snapping up land on the UK, the supermarkets together it could do is send auditors into the big Milton Keynes, Cambridge, Twickenham which rivals could build. Of 408 sites have an ‘oligopoly’, i.e. several four supermarkets to look for examples and Salisbury. The same goes for held in 'land banks', 190 are owned by 75 supermarkets control the whole of alleged malpractice. There is now a Sainsbury in south-west London and Tesco. market, and this situation concerted call from suppliers large and Safeway in Dumfries. The Commission small as well as environmental, constitutes a market failure and development and farming groups for a should be investigated. binding code of conduct, independent dispute mechanisms and a retail Are we being 'ripped-off'? The report did admit to four regulator. Meanwhile, farmers and other situations where competition is suppliers continue to suffer exploitation As a recent article in the Observer Safeway lodged a successful at the hands of the supermarkets. broadly distorted and operates claims, 'supermarket pricing is a complaint with the Advertising 73 against the public interest: 2) Selling below cost price spectacular black art'.76 From Standards Authority (ASA) 1) The relationship between big i.e. the use of loss leaders ensuring that the store layout leads contesting Tesco's claim to be 14% supermarkets and their suppliers. you past expensive and 'fresh' items cheaper. It believes that Tesco's The Commission called for an 3) Changing prices according to first, to making price comparisons claim to have cut prices by a billion enforceable code of local competition i.e. difficult, the supermarkets know how pounds over five years has been practice to ban practices price flexing. to fleece the pockets of unsuspecting offset by price rises on other ranges. such as demanding payments from suppliers The Report found that in shoppers. Next time you are in a The ASA also deemed the 'Pocket for buyer's visits, charging the South East, East supermarket, ponder this, what’s at the difference at ASDA, always' ad them for the cost of Anglia and the West eye level? The cheapest or most campaign misleading. Midlands, shoppers pay refurbishing stores and expensive item? In October 2001, it changing agreed prices more for their shopping. In Asda's case, it had only been a Tesco's prices varied as emerged that Tesco had raised its retrospectively or without couple of months since they were notice. (See section on much as nine per cent prices in the weeks before it began its fined for misleading customers over ‘Encouraging Industrial regionally. The new £100 million pound price cutting Agriculture’) To the fury of Commission, however, campaign, so as to maintain its price cuts at a superstore in took the unprecedented the NFU and other profits.77 Only half of the price cuts Hellesdon, Norwich. This complaint supplier organisations, the step of making the was brought by Tesco. Who else, recommendation to do were published on its web-site where DTI allowed the after all, but the supermarkets would supermarkets to draw up nothing on the grounds it was shown that more than 10% had have the resources to monitor these their own voluntary code that putting up the price only fallen by a penny and a further 78 of practice and dispute would harm the 5% by 2p. price changes? mechanisms. disadvantaged.

28 29 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k

In January 2002, Tesco were again In 1996, the major supermarkets and 'Mummy, mummy, can we buy the Barbie spaghetti shapes?' accused by the Observer of a 'price 12 major food manufacturers drew cutting' scam. They claimed that up a pact to co-operate on Tesco's website showed price promotions, launches and Promoting unhealthy processed food increases on 1,750 popular items distribution.81 In March 2000, There is a crisis growing in the world Ever noticed how in-store since Christmas. Tesco claimed these Tesco, M&S and other international of supermarkets, and it is based on promotions and advertising were special offers ending.79 food retailers announced they were growing consumer distrust. A Good campaigns tend to focus on cheap setting up a 'Worldwide Retail Housekeeping Magazine survey in synthetic foods, especially those Exchange' - essentially a global September 2001 showed that only aimed at children? In a recent Co-operation buying club to purchase products one in six trusted sopermarkets to survey, the Co-op found that 73% of more cheaply. and Cartels sell safe food. Three in four people children ask their parents to buy Despite the posturing, the This came just weeks after Sainsbury (76%) are more concerned than ever sweets and crisps they have seen supermarkets have often worked announced the formation of before about the advertised and together to prevent new entrants to 'GlobalNetXchange' a joint venture safety of the food only 19% give up the market. In 1993, Sainsbury, with US corporation Sears and they buy.84 when their Tesco and Safeway jointly hired a PR French food giant Carrefour.82 parents say no. Beside the health agency and planning consultancy to Meanwhile 71% of scares associated prevent US discounter, Costco, from In January 2002, a former senior kids have bought with factory operating in the UK.80 director of Sainsbury, accused Tesco something on the and Sainsbury of having an farming and food strength of a free 'understanding' not to undercut each handling, gift or special other's prices on the most popular supermarkets offer.85 The products. The anonymous promote Walkers crisps whistleblower told the Sunday Times unhealthy food, 'Books for ‘If you look at the prices charged for which can lead to Schools' these items, they are identical, which diet-related promotion and is no coincidence. Senior staff diseases such as Tesco's voucher constantly move between the cardiovascular schemes for supermarkets, which helps disease (CVD), computer perpetuate the understanding.’83 diet related equipment were cancers (breast, both slammed by These allegations cast serious doubt colon etc), the Consumer's on the clean bill of health given to osteoporosis, Association for the supermarkets on the cartel issue obesity, diabetes, promoting in the Competition Commission dental problems unhealthy eating report (see section on 'Rip-off' and vitamin and iron deficiencies. as well as being a rip-off. You have Britain). Obesity is only now being recognised to spend £220,000 at Tesco to get a as a food-related disease of epidemic computer worth less than £1000.86 proportions in the UK.

30 31 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k

Between 'cause-related marketing' A new trend is to promote the and 'pester power', instead of giving healthy aspect of food products, Choice? Convenience? And value? our children the best food available, advertising the added vitamin and we are giving them the most mineral content in processed food. It When we look more closely at the Supermarkets are not fair unhealthy. Such foods often consist is not surprising that vitamins have hidden costs of supermarkets, the competition; in fact they are of highly processed, pre-fried, re- to be added to products as intensive choice, convenience and value they exploiting you and me. They are also formed bits of animal protein or agriculture and processing have led supposedly offer becomes preventing the development of a carbohydrates heavily loaded with to a massive decrease in the nutrient questionable. By putting small vibrant and exciting local food saturated fat, sugar and salt. Strong levels in foods.91 independent retailers out of economy. flavours easily appeal to a child’s business, they are hardly providing Just think: supermarkets could uneducated palate. On the other choice. By forcing consumers to use become real market centres again hand, there is strong evidence for cars for their weekly shop, they are owned by their local communities the protective effect of fruit and hardly convenient, and when we and producers, where farmers from vegetables against chronic diseases So exactly what's in processed calculate the cost to the taxpayer, the local region would sell their such as CVD and cancers.87 foods? Take 'Sunny Delight', the small farmers, our health and the Procter and Gamble drink often environment of 'cheap food', it seasonal produce, and local Coronary heart disease (CHD), which mistaken for fruit juice. It consists of doesn't seem such good value. producers would bring their wares. makes up half of all cardiovascular water, high fructose corn syrup (the All products from further afield disease, costs the taxpayer around major ingredient in synthetic fizzy This is not just the opinion of would be fairly traded and imported £10 billion a year. Obesity costs the drinks) and 2% or less of each of the middle class environmentalists, as by small companies. There does not tax payer £2.5 billion a year.88 following: Concentrated orange juice, the recent submission by the need to be exploitation in the food National data from 1971-1991 concentrated tangerine juice, National Consumer Council to the system. suggest that it is increasingly the concentrated lime juice, Food Policy poorest in society who suffer from concentrated grapefruit juice, citric Commission on CHD.89 A recent survey by the Food acid, ascorbic acid (vitamin C), beta- food and Commission illustrated that a carotene, thiamin hydrochloride farming by shopping basket of 'healthier (vitamin B1), natural flavours (catch- low income options' was a staggering 51% more all term for synthetic flavourings consumers 92 expensive than a basket of standard that do not have to be listed on the shows. processed foods. They also found label), food starch-modified sodium that healthy options were not citrate, cottonseed oil, propylene available in many discount stores, glycol alginate, xanthan gum, guar especially a good range of fresh gum, sodium hexametaphosphate, fruit, vegetables and staple foods potassium sorbate (to protect flavor), which need preparation such as flour yellow #5, yellow #6. and dry pasta.90 Next time you are in a supermarket you may like to ask Knowing this, it is tempting to eat a why it is that fresh healthy produce nice juicy organic orange or home- is more expensive than processed grown apple instead. It is probably food on their shelves. cheaper and certainly better for you!

32 33 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k

•Lobby for more help for farmers to We need strong government And for dessert... convert to organic production legislation to curb the power of the through the Organic Targets Bill that supermarkets, prevent the aims for 30% of farmland to be exploitation of suppliers and the what you can do about it? organic by 2010. Contact Sustain or destruction of small retailers and FoE for more information (see the attendant social and There are alternatives to supermarkets that are community below). environmental costs. focused, environmentally sustainable and gathering momentum. Ideas on the table include a strong •Support the Localisation Bill which What they need is your support. enforceable supplier code of practice has provision for more government drawn up by the suppliers themselves; a Individual and •Support local farmers by using investment in a local food economy. ‘Local food targets act’ for UK and local their farm shops and organic box Contact Sustain for more seasonal produce to be supplied in supermarkets; an independent regulator schemes and going to farmers’ information. local action: for the supermarkets ‘OffTrolley’ (!); and •Take an interest in where your food markets. regulation on gangmasters to stop the Policy recommendations: exploitation of farm-workers and comes from. •Set up a community shop. Find out After allowing supermarkets to come undocumented migrants. about community-owned retailing. •Grow your own vegetables. up with voluntary codes, it is clear A major rethink of competition law is Contact Toby Peters on 01435- that these do not work. Well urgently needed. We need to investigate •Boycott supermarkets and large 883005 or [email protected]. more thoroughly how monopolies and intentioned projects such as ‘Race to food manufacturers. oligopolies affect suppliers as well as •Support farmer's actions to end the Top’ or the Ethical Trading consumers and also look at local •Support small, independent their exploitation at the hands of the Initiative, which work with the monopolies. We could follow the example of other European countries in curbing supermarkets. For example ‘Farmers supermarkets, have led to minimal suppliers, processors and retailers. persistent below-cost selling, For Action’ campaigns. See their changes, and are often undermined •Buy imported goods only when they by supermarket behaviour. It makes sense to relocalise food website: www.farmersforaction.org production and retailing. This would cannot be grown in this country. include building covered food markets, Current legislative through directed funding from Regional •Encourage small retailers to stock Development Agencies and tax incentives locally produced food. initiatives: to local traders. •Support the food justice bill to We should also limit supermarket •Help set up new methods of developments through a mandatory distribution locally, eg. co-operatives abolish food poverty in the UK, economic impact assessment to be for marketing local produce locally, spearheaded by Alan Simpson MP undertaken before a supermarket is consumer co-operatives to buy with a core of organisations granted planning permission. There could healthy food in bulk for your including Sustain, Child Poverty be a cap on retailer floor space. community and delivery schemes. Action Group, Help the Aged and Supermarkets could be taxed for the Friends of the Earth. Contact Ron environmental pollution they cause, taxation on non-recyclable •Consider becoming vegetarian or Bailey 020 8698 3682. Email: packaging, excessive vegan as a way of reducing your own [email protected] transportation and car-parking support for industrial farming spaces. methods. www.adbusters.org

34 35 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k

We should support UK farmers with high environmental and Further Reading Reports and Articles animal welfare standards against unfair trade rules. Monbiot, G (2000) Captive State: The The Ecologist 'How Bogus Hygiene Call for agriculture to be taken Corporate Takeover of Britain, Regulations are Killing Real Food'. June out of the WTO and an end to MacMillan. 2001 export dumping. See www.viacampesina.org and Harvey, G (1997) The Killing of the The Co-op: Food Crimes: A Consumer www.iatp.org for more info. Countryside. Vintage. Perspective on the Ethics of Modern Campaign against the GATS Atkins, P and Bowler, I (2001) Food in Food Production. See the Co-op website agreement of the WTO Society. Society, Culture and Geography. www.co-op.co.uk agreement which could ease London: Arnold/New York: Oxford 'What's Wrong with: Tesco?' and 'Every supermarkets in their quest to open up more markets overseas University Press. Little Hurts' in Corporate Watch 3. 1997. against the wishes and best Blythman, Joanna (2004) Shopped! The www.corporatewatch.org.uk interests of local populations. Shocking Truth about British Checkout Chuckout: A directory of Watch out for other good policy Supermarkets. Fourth Estate. local groups campaigning ideas for example, Wye Cycle's against supermarket proposal for legislation stating Lucas MEP, C and Hines, Websites developments. See that no individual business may C (2001) Stopping The The Guardian has a Corporate Watch be responsible for more than 1% Great Food Swap - substantial section on the of UK food retailing. Relocalising farming crisis. website. Europe's Food www.guardian.co.uk Pretty, Professor J Supply. The Food industry websites such as - Some Benefits For more information Green Party www.just-food.com and www. and Drawbacks on supermarkets and Raven, H. Lang, T. grocertoday.com of Local Food Systems. Centre industrial food production: and Dumonteil, C George Monbiot's website for Environment (1995) Off our www.monbiot.com has a • Friends of the Earth - ‘Real Food’ Campaign. www.foe.co.uk and Society, Trolleys? Food substantial section on • Grassroots Action on Food and Farming (GAFF) highlights corporate Retailing and the supermarkets and University of Essex. control of agriculture and builds alliances between environmentalists, Hypermarket Economy. farming. See 'Reports' on campaigners, farmers, farm groups and the public. www.gaff.org.uk IPPR, London. www.ruralfutures.org • Michael Hart, Small and Family Farms Alliance, Tel: 01726 843 647 [email protected]. co.uk Schlosser, Eric (2001) Fast Food 'Why Health is the Key to Food • National Association of Farmers Markets www.farmersmarkets.net Nation: The Dark Side of the American and Farming' - submission to the Policy • Big Barn - The Virtual Farmers Market - Tel: 01234 871005 Meal, Penguin. Commission on Food and Farming eds. www.bigbarn.co.uk Tim Lang and Geof Rayner (2001). Andrew Simms et al (2002/2003) Ghost • Via Campesina - global small farmers network www.viacampesina.org Download at www.foodpolicy.co.uk. Town Britain: the threat from economic • Viva! Campaigning and researching on the factory farming of globalisation to livelihoods, liberty and How Green is your Supermarket? animals. Tel: 01273 777688. www.viva.org.uk February 2004 The Liberal Democrats. • Stop the Safeway Takeover Alliance - campaign material available local economic freedom. And Ghost Norman Baker MP from FoE and GAFF. Town Britain II. New Economics Foundation.

36 37 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g w i t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k

24 Anonymous source at the Farmers World Network 46 Plugging the Leaks: A briefing (2001) by the Centre 69 Oxfam UK ‘ Trading Away our Rights: Women meeting 24th November 2001. for Participation. NEF: London. Downloadable from working in global supply chains’ (February 2004); References www.neweconomics.org ‘Praise Uncle Sam and pass the 18p an hour’ Greg 25 Accurate on 28th February 2001. From author's own Palast The Observer 20/6/99 research in Tesco and the bi-weekly farm-gate price 47 See www.just-food.com and 'Battle in Store? A 1 www.guardian.co.uk/graphic/0,5812,1050478,00. guide produced by the Small and Family Farms discussion of the social impacts of the major 70 Personal communication with GMB researcher Ida html; How Green is your supermarket? (see further Alliance. supermarkets page 5. Sustain. Written by Corinna Clemo 2001 reading). Figures include recent acquisitions in Hawkes convenience sector March 2004. 26 DEFRA Quick Agricultural Statistics 71 'Agriculture in Crisis: Why Britain's farmers are statistics.defra.gov.uk/esg/quick/agri.asp. viewed 48 Hillman, M 'Changing patterns of shopping drawn making a loss on nearly everything they grow.' The 2 Keynote Report on Supermarkets and Superstores March 2004 from National Travel Surveys 1975-91' . Policy Independent 28th August 1999. January 2003 Studies Institute 1994. Quoted in 'Off Our Trolleys'. 27 Patrick Wintour. ‘Extent of farm crisis revealed’ The 72 Captive State p.184 3 Grocery Retailing 2003: The Market Report, IGD Guardian 11/4/04 49 Ghost Town Britain II (2003) 73 'A Summary of Supermarkets: A Report on the 4 Grocery Retailing 2002: The Market Report, IGD 28 Robert Harris ‘Incomes slowly recovering’ Farmers 50 For every litre of aviation fuel burnt, 2.5 kg of CO2 Supply of Groceries from Multiple Stores in the Weekly, 30/1/03 are released into the atmosphere. Burning a litre of United Kingdom'. DTI, UK. 2000 5 The Money Programme. Store Wars. Supermarket diesel fuel releases 2.7 kg of CO2. Showdown. Wednesday 26th February 2003.19.30. 29 Jules Pretty 2001 'Some Benefits and Drawbacks of 74 John Breach from BIGFA in a letter to Patricia Hewitt BBC2. Local Food Systems' www.ruralfutures.org 51 www.defra.gov.uk/esg/Excel/selfsuff.xls 7th November 2001. 6 Opinion: 'How should porcupines try to mate' in The 30 'Don't Blame the Supermarkets' by Neil Davison, 52 Stopping the Great Food Swap - Caroline Lucas 2001. 75 'Supermarkets abuse power' by Paul Farrelly and Grocer 15th Feb 2003. Financial Times. www.ft.com/fteuro/qbe7a.htm See Further Reading. Oliver Morgan. The Observer 1/10/01. 7 M+M Planet Retail (2001) '30 Retailers now account 31 ibid. 53 ibid. 76 'Black arts flourishing amongst the black-eyed for 10% of Global retail sales.' beans' by Neasa MacErlean. The Observer. Cash 32 Policy Commission on Food and Farming industry 54 'From Farm to Plate'. The Guardian 28th February section. 3/3/02 8 Ibid. stakeholder meeting 23/10/01 2001. 77 'Tesco price drive under new attack' by Sarah Ryle, 9 IGD Global Retailing Index. See IGD website 33 'Corporate Pigs and Other Tales of Agribusiness' 55 'Sins of the Superstores Visited on Us' George The Observer 9/10/01. Multinational Monitor. July/Aug 2000 Vol 21. Nos. Monbiot. The Guardian 1st March 2001. 10 Fortune Magazine: Global 500 figures for 7&8. 78 'Asda fined £9,000 after judge rules that it mislead 2002/2003. 56 NOP Omnibus, carried out the poll between the 8th customers over low prices', 21 Sep 2001 just- 34 Where reference not made, from 'Fast Food: Some and 10th November, see Friends of the Earth press 11 The Retail Giants: Global Expansion and Local food.com facts and figures to make you lose your appetite' release 18/11/02 New Poll Shows Public Back Concerns by Petra Kjell. In 'Corporate Breakdown' Clare Dwyer Hogg. The Independent (London) Farmers v Supermarkets 79 'Tesco under fire for price cut initiative, is it a 'scam' Edition 5. Feb 2002. September 5, 2001. 18/2/02. www.just-food.com 57 Friends of the Earth media briefing 'British Apples 12 BBC2 The Money Programme. 'Store Wars: 35 'That's the Horror of Haskins' by George Monbiot. for Sale', November 2002. 80 Captive State pp.177-178. See Further Reading Supermarket Showdown." 2003. The Spectator. 1st September 2001. section. 58 'Sainsbury loses out to Tesco in Air Miles loyalty 13 Verdict Research Report on Non-Food in Grocers 36 Pesticide Action Network UK Briefing: Pesticides in card deal' 11/1/ 02 just-food.com 81 Off our Trolleys Pg 27. See Further Reading section. (2001). www.kamcity.com/Library/articles/ Water. www.pan-uk.org nonfood.htm 59 'From Farm to Plate' 82 Food Suppliers create Global Marketplace BBC online 37 'Paying the price for cheaper food' The Observer, March 20 2000. 14 'UK's Tesco shocked at losing Levi case' Reuters 25th February 2001. 60 'From Market to Hypermarket' in The Ecologist 20/11/01 Vol.24 No.4. July/August 1994. 83 Whistleblower alleges price fixing at Tesco and 38 The Grocer's Seminar: What Price Safeway? Reported Sainsbury. 18/2/02 http://just-food.com 15 'Tesco to offer divorce finalising and will writing in The Grocer 15th February 2003. 61 Professor Tim Lang. Centre for Food Policy. Thames services in store' 21/1/02 just-food.com Valley University quoted from Gangmasters 84 'Shoppers loosing faith in Supermarkets' by Jo 39 See Corporate Watch profiles on agrochemicals documentary (see below). Willey, PA News 9/9/01. 16 ‘Supermarkets take cut of Fairtrade cash for poor companies: Bayer, Monsanto and Dupont. farmers’ Robert Winnett. Sunday Times 29/6/03 62 'Gangmasters' Panorama BBC1 Transmitted 19/6/00 85 Food Crimes: A Consumer Perspective on the Ethics 40 Pesticides in Supermarket Food (March 2004). Transcript on http://news.bbc.co.uk/hi/english of Modern Food Production. CWS Ltd. www.co- 17 ‘Tesco well ahead of the online retailing pack’. www.foe.co.uk/resource/briefings/pesticide_superm /static/audio_video/programmes/.../ op.co.uk. www.grocertoday.com 1/3/04 arket_food.pdf transcript_19_06_00.tx 86 'School voucher schemes under fire' 6 December, 18 'A Man Walks into a Supermarket...' Asda Press 41 Ghost Town Britain & Ghost Town Britain II. Andrew 63 'Unions make In-roads into No-Go areas' Labour 2001 http://news.bbc.co.uk/hi/english/education/ Release, 21st June 2001. Simms et al. New Economics Foundation 2002/2003. Research Department press release 1/9/99 newsid_1694000/1694388.stm 19 The Big Issue 10 - 16th December 2001 42 Grocery Retailing 2002: The Market Report. IGD 64 See ‘Race to the Top’ research on Labour rights in 87 For more information see 'Why Health is Key to Food 20 'Supermarkets are harnessing PR as they battle to the UK. www.rttt.org Module 3. and Farming'. See Further Reading Section. 43 Figure quoted by Caroline Lucas MEP at ‘Good Food become the definitive champions of the consumer'. on the Public Plate’ conference. Oxford Brookes 65 ‘The Big Staff Checkout’ 20/9/03 88 Ibid. Robert Gray Marketing Online www.marketing. University 24 March 2004 www.grocertoday.org haynet.com/features/superpr/superpr.htm 89 Ibid. 44 Keynote report Supermarkets & Superstores 2001 66 'Supermarket Wars' by Steve Davison in Socialist 21 Famous 'market stall' slogan of Jack Cohen, founder Appeal. www.socialist.net/74/supermarket_wars 90 'Healthier diets cost more than ever!' Food Magazine of Tesco. 45 Porter, Sam, and Raistrick, Paul: The Impact of Out- 55. Oct/Dec 2001 of-Centre Food Superstores on Local Retail 67 Keynote Report Supermarkets and Superstores 22 UK: Cheaper food No.1' 2/10/01. www.kamcity.com/ Employment, The National Retail Planning Forum, 2001. 91 'Why Fruit and Veg were better for us 50 years ago' namnews/asp/ newsarticle.asp?newsid=6737 c/o Corporate Analysis, Boots Company Plc., Daily Mail, March 5, 2001. www.whale.to/w/veg.html 68 See Wal-Mart watch website 23 Quoted in ‘Summary Of Supermarkets: A report on Nottingham. www.walmartwatch.com/info/ 92 See Policy Commission on Food and Farming. the supply of groceries from multiple stores in the www.cabinet-office.gov.uk/farming United Kingdom.’ Published by the Competition Commission. DTI, UK. 2000

38 39 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS