Supermarkets in Britain make huge profits, underpay farmers, exploit their own staff and cause a lot of harm to consumers and retailers. The oligopolistic UK supermarket sector is increasingly dominated by a few giant firms. Four big supermarkets of TESCO, ASDA, Sainsbury’s and Morrisons decide on the livelihood of people, what they eat and how they consume. The Global South and developing world provide cheap produce for British supermarket shelves. Supermarkets can benefit from poor economic conditions because they can buy cheaply and sell at low margins. Amid rife hunger and poverty in England, supermarkets produce mountains of waste of perfectly good food that could feed millions who barely have access to adequate or healthy food.
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Narration: The supermarket giants are in crisis. They are casting plans to build new super stores as customers desert them for smaller shops. One of the giants TESCO has been caught fiddling its profit figures and perhaps more importantly they have been accused of wasting food on the paying farmers and exploiting their own staff. In the light of all this we ask are the supermarkets past their sell-by date.
Supermarkets are a big part of our lives. Whether we like it or not. 3 out of 4 grocery items purchased in the UK are bought from just 4 stores, TESCO, ASDA, Sainsbury’s and Morrisons. Adding some supermarkets with smaller market share like Iceland, Little and ALDI and the figure rises to over 80 percent of all groceries sold coming from jut a hand full of supermarket giants. For every Pound we spend in the shops more than 52 Pounds goes on groceries and most of that goes into the pockets of the Supermarkets. But are these huge cooperation serving US well?
SOUNDBITE [English] Erinch Sahan, Private Sector Advisor of Oxfam: “In February 2013 we decided to launch a campaign that tried to change the way that the world’s large food and beverage companies impact the lives of people around the world. We were seeing increasingly that some of the largest companies, even though their consumers wanted them to do more weren’t doing enough. They were not acting to try to address some of the entrench poverty and the injustice that was happening in their supply chains, had way too many blind spots on issues to do with gender equality, on land rights, on water rights, on climate, the way workers are treated, and we thought that they need to hear more about where they were failing and how they could do better.”
Narration: Something between a third and a half of all the food produced for our consumption never makes it into the human stomach that includes 68 percent of packed salad, 47 percent of bakery items and 40 percent on apples. The big supermarkets claim this isn’t their fault but it’s the customers and food producers who are to blame. But we found out that this is far from the whole truth.
SOUNDBITE [English] Graciela Romero Vasquez, Member of War on Want: “The supermarkets in this country, in the UK, and the globally are causing a lot of harms to workers, farmers, consumers and retailers, small shop retailers. They have destroyed, here in the UK, small shops and by the way small shops for that matter. We see that the four big supermarkets in the UK are controlling the most of the market.”
Narration: The European Commission seems to back up the supermarkets’ claim that food waste is not their fault. The commission estimates that supermarkets only directly waste 5% of food while consumers waste 42% and producers 39%. In fact we do not know how much the supermarket waste because they refuse to release the figures. The charity Oxfam has slammed food supermarkets’ lack of transparency. Only Sainsbury’s admits to wasting some 44 Thousand tons of food every year, but this only part of the story. Closer studies Shows that supermarkets have developed ways to distribute what could become their food waste such as eggs stock to other parts of the supply chain.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “One of the great ironies of supermarkets if that they are built on a very narrow definition of efficiency, Efficiency for the big supermarkets today is about driving costs down, but whenever you drive costs down you usually drives them up for someone else and what is cheap for the supermarkets and what maximizes their profit is the cost for others.”
Narration: This creates the impression that producers and consumers are more at fault. First of all, the very location of the supermarkets on the edge of town encourages consumers to buy more than they can consume. If you drive some distance and have a car booth to fill perhaps on a monthly shop the tendency is to purchase more that you need. And these groceries may well go off before you consume them. Secondly, discounted groceries and buy one get one free offers, give the illusion of savings that may well simply end up as waste.
SOUNDBITE [English] Jane Collins, Former Supermarket Manager: “All supermarkets well have special offers on weekly like the buy one get on free for instance which everybody knows. But you have no saying how much of that stock will come into your shop so you may get the same amount as a big store and generally you end up with quite a lot leftover at the end of the promotion, so again wastage or you got stock room for the things that are going out of date.”
Narration: When the sell by date is not as simple as it might first appear. Few costumers notice the difference between best before and the sell-by date.
SOUNDBITE [English] Jane Collins, Former Supermarket Manager: “They get rid of it on a sell-by date. But usually fresh food will have three days on it. So the use by date is usually later than the sell-by date. So you can still use it for three days and I think this is an issue with people at home as well. They tend to throw the food away because it has reached the sell-by date. But you still get 2 or 3 days on the use-by date.”
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Narration: Nearly two-Third of customers didn’t know the difference. According to a House of Lords report food is perfectly edible after its best before date but much of it immediately ends up in the bin and the dates themselves are usually chosen as early as possible by retailers keen to avoid legal action.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “Now ironically in the face of their economic efficiency, their narrowly defined economic efficiency, it also generates a huge amount of other kinds of waste. So they may push 3 for 2 or two for one offers, the buy one get one free models. It ends up with the equivalent of about one-third of what you buy going into waste and landfill.”
Narration: Some 10% of the 10 billion Pounds worth of food thrown away is for this reason, even though it’s good enough to eat. Sell-by dates are even shorter on imported food. Locally produced food would cost the supermarkets more but its shelf life would be longer and better value for the consumers.
SOUNDBITE [English] Graciela Romero Vasquez, Member of War on Want: “The supermarkets are not buying from the local produce. They are basically importing food, most of the time they are importing food at the greater expense of the environment because they have to. They transport. They bring in apple for example from New Zealand when they could find apples here in the UK. But of course in the New Zealand they will find cheap apples than they find here. This is increasing the transport cost, paying peanuts to the people in other countries to be able to access those food here.”
Narration: Then there is the end of the day waste that could be given away or given to charity. Some retailers pour bleach or blue dye on their products while others slap are not for human consumption sticker on the food they discard.
SOUNDBITE [English] Para Sarum, Director, Food for all: “Food getting tripped out, sometimes bleach is thrown on it. It is kept well away from people. You get criminal record if you try to take that food. And actually they should be getting a criminal record for throwing that food away. It is a criminal thing. The amount of waste that good food is taken away.”
Narration: Over half of food waste is generated in this way and could be saved. But the market power that supermarkets use to push waste onto the consumer pales into insignificance in comparison to the way they treat farmers. Supermarkets have huge buying power. Even large farmers are small in comparison.
SOUNDBITE [English] Tim Gibson, Yorkshire Dairy Farmer: “The supermarkets collaborate, work together. They are the biggest buyers of all milk in the country so they can just control the price between them.”
Narration: Supermarkets have a 75 to 80 Percent share of farmers produce. Supermarkets contracts can make or break food producers both in this country and abroad.
SOUNDBITE [English] Tim Gibson, Yorkshire Dairy Farmer: “They want to know all of the business accounts of the farm. Exactly what they cost to employ people, exactly what is he paying himself, exactly what is the food cost and they use a system to monitor all those costs against basically the worker. What it costs to the farmer to make his milk and when they pull all that information together from a group of farmers supplying one supermarket, they have got a very strong tool to then be able to work what it costs in their supply to make that milk and they pay that little bit more than the cost of production just to producer and that is not fair trade, that is just fixing. That’s the same, well, that’s what it costs you to make it. So that is what I’m having here.”
Narration: But supermarket contracts with farmers lead to huge levels of waste. Take for instance the issue of so called ugly fruit and veg. Experts calculate the supermarket obsession of presenting us with fruit and veg that looks good lead to 70 percent of a framers crop being rejected by retailers.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “They also have very particular ecstatic criteria for the produce they get. Which means even if the food is perfectly good and nutritious but doesn’t match the precise milliliter length that they want for a French bean or whatever, you could end up with a vast amount of bean wasted.”
Narration: The misshapen produce is either left in the field to rut, sold off to be added to manufactured product such as soup, used in animal feed or put in the composting. Another 20% is wasted because farmers overproduce in order to ensure that they don’t miss the strict production targets stipulated in their contracts with supermarkets. So the combined waste created by the supermarkets desire for perfect looking products and by the use of strict production contracts can lead to as much as 50% of the produces crop going to waste even before it gets off the farm.
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SOUNDBITE [English] Para Sarum, Directos, Food for All: “All the food products we use have been rejected either for cosmetic reasons. The banana strays, the carrots got a bend, wrong colored, the apple too big, and apple too small, and we take all this food and we cook it straight away and we reuse it back.”
Narration: And if this one is not bad enough, supermarkets can cancel contracts with farmers at the last moment leaving them with an entirely unsold crop which often goes to waste.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “One of the things that supermarkets do of course is that they like to keep their options open. They know broadly speaking the king of offers and produces that they want to put in front of shoppers but they also want to have flexibility and that means very often that they’ll have suppliers caught up in exclusive contracts which means that if they change their mind their suppliers are left high and dry with nowhere else to go.”
Narration: A House of Lord report on food waste highlighted the issue. It said it is clear that, actions by retailers such as the cancelation of orders of food that have already been grown lead to food waste earlier in the supply chain. Yet again waste caused by supermarkets is made to appear as if it’s someone else’s fault. Retail supermarkets are a classic case of what economists call oligopoly meaning the few giant firms are competing with each other for the same market.
SOUNDBITE [English] Graciela Romero Vasquez, Member of War on Want: “Supermarkets play a key role within the global full system that has taken over resources from people and have been trying to plan it. There is no issue about individual responsibility from consumers; it’s a big responsibility on corporation that runs it. It’s the capital concentration in this plan. It has been in the few hands of corporations like Monsanto, Cargill, Tesco, Walmart which ASDA working in the UK. That is what we are talking about. We are talking about how few corporations are deciding the future of people, the livelihoods of people, what we eat, how you consume, where you go and the supermarkets buy and sell. There was a creation of corporation. There were created with the specific purpose of controlling people psychologically, how you buy, the whole setting of a supermarket, the isles, how they change. They are psychologically programmed so that you go on buy what they want.”
Narration: This is what producers are raced to the bottom in terms of forcing ever lower costs and ever more demanding contracts onto food producers.
SOUNDBITE [English] Erinch Sahan, Private Sector Advisor of Oxfam: “What we are seeing is uncertainty and really it is a way that the global players are kind of threatening to move away from some of the farms in the developing world. So they are saying well at any moment we can move and stop by from Ethiopia if you don’t give it to us at this price, and then they go to Ethiopia and then they will say well we might move to Kenya if you don’t give it at this price and under these conditions. So we are seeing a global race at the bottom happening in terms of terms and conditions.”
SOUNDBITE [English] Tim Gibson, Yorkshire Dairy Farmer: “TESCO was the first one to announce the surprise war on milk. They announced it that they were going to slash the price on the supermarket shelf and virtually started the price war between the supermarkets and that would. so initially how can they ethically do that to the dairy industry and Just suddenly collapse our price overnight so we are not going to because we are still paying our farmers the same price and its one of the highest prices or it is the highest price. Which it potentially was for those 700 farmers, we save that price. They were still getting the price that they were contracted into. It has now dropped 3 or 4 Pens but the whole market drops by that. Well that’s because the biggest supermarket drops the price of milk causing the price war. So the whole industry went into turmoil. The downward spiral started and six months later they got their price down as well. So their farmers are not now getting the price they promised them earlier. They are getting less, and all of this, are getting loads less because everybody went into turmoil. If TESCO was going to do whatever it is for one pound or whatever the headlines were going to be, your next supermarket will do for 0.95 P, the next one does it for 0.94 P and then you get to the point where you have so many discounts and they will do all for 0.80 Pounds, So what they have come out with what?”
Narration: But of course no one in the supermarket chain can be sure they will maintain their market share. They maybe and often are ordering too much, they then cancel their orders, reject the food produced because of its look or sell off stock in discounted packages and by one get one free offers. As one study concludes the most significant source of waste is overproduction which means producing more, sooner or faster than its required by the next process. In study of global retailers
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Narration: Oxfam concluded, the hundreds of brands lining supermarkets’ shelves are predominantly owned by just 10 huge companies and they have a combined revenue of more than one billion dollars a day; Whilst, 1 in 8 people go to bed hungry every night. And as the recession has hit home since the banking crash of 2008, the supermarkets are being the last to feel the pinch. The UK economy as a whole is only narrow recovering to the point where it was before the crash of 2008. Real wages have undergone their longest, steepest decline since World War II. But every year of the recession are seen supermarkets grow by 2.5 percent that will leave supermarkets racking in a massive 164 billion Pounds. According to one industry report given that, large supermarkets can buy cheaply and sell low at the margins, this means that supermarkets can actually benefit from poor economic conditions like those that have be prevalent for over much of the last five years.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “But even today we are still reliant upon a model which squeezes the local economics and the local communities of the global south of the developing world to provide cheap produce for British supermarket shelves in which you are not paying the full environmental cost or the full social cost of production.”
Narration: This is because they sell the necessities that most people cannot afford not to buy. The biggest change that the worst post war slump has produced in the world of supermarkets is that the really low cost supermarkets like ALDI and Little have taken a bite out of the market share of the big four. In the middle of the recession ALDI sold a 450 Percent surging profit. That was an increase from an 18.7 million Pounds to 103 Million Pounds in just 12 months. The people who pay for these profits are not just cash-strapped consumers in general; they are also poorly paid supermarket workers. The Fair Pay Network has slammed the big four supermarkets for paying poverty wages. Their report estimates that supermarket workers are paid just 6Pounds 83 Pens an hour and only 1 in 7 receives a living wage.
SOUNDBITE [English] Jane Collins, Former Supermarket Manager: “Compare to the big bosses what the people on the shop floor do the money is very very poor and most people start at own minimum wage and a lot of the companies are now giving you zero hours so if you need you they will use you, so there is no even any security in your job in that way anymore. You use to have a contract you knew what days you worked but now they expect everybody to be totally flexible without contract which is not easy for people if you have family or commitments so… and when you see bonuses of 6 million Pounds going to directors and you can’t even have your 20 Pound Christmas bonus which were used to buy the turkey, that’s all gone, it makes you feel a little bit where is the fairness here?”
Narration: The greater London authority has calculated that the London wages earner who earns less than about 7.25 Pounds an hour will be living in poverty even after benefit some tax credits are taken into account and then there are an even worse paid agricultural workers. In the UK average agricultural workers are barely above the national minimum wage meaning that many agricultural workers will be earning well below the minimum. For food source from abroad the picture is worse still. The charity war on want has revealed that workers in the tea industry in Kenya supplying UK supermarkets earn as little as 7 Pens an hour. Others on poverty pay include workers on farms in South Africa supplying wine and fruit to UK supermarkets as well as flower workers in Colombia and Kenya.
SOUNDBITE [English] Erinch Sahan, Private Sector Advisor of Oxfam: “The conditions for farmers in Britain parallel often the conditions for farmers in developing countries where they have got less and less bargaining power and that lower amount of bargaining power is meaning that more risks have been pushed down onto farmers here and abroad and a lot more devalue has been captured by supermarkets, by manufacturers and processes in that supply chains and the big global players. We are seeing poor wages; we are seeing land rights abuses sometimes in supply chain where people are forced off the land because they don’t have the right documentation, we are seeing overuse of water in some regions where people are not able to access enough water for their daily use to grow food for themselves because the water is being used for farms that are supplying global supply chains. So it is a mixed impact and it very difficult to provide the net impact. But what we definitely know is that supermarkets have enormous power.”
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SOUNDBITE [English] Erinch Sahan, Private Sector Advisor of Oxfam: “When they want to invest and put money into making sure that the conditions are fair and that farming is sustainable in the developing world then they can make this happen but it means that they are going to have to tackle very tough issues which include how of the pie that they are getting because if they want to keep getting more and more of the slice of the pie in terms of value, in terms of profit, then those costs are going to be incurred by people that don’t have the power to fight back and that is going to often mean that people are living in poverty and people are stock in poverty who are producing the very agricultural goods that are going on their shelves.”
Narration: Supermarkets are huge cooperation supplying necessities of life to millions of people. They make huge profits. Pay poverty wages and are responsible for enormous levels of waste. If a cartoon villain designed a machine like this we would scarcely believe it, but here it is on every high street in the country a device which exploits the very people, who produces its wealth, or the workers in the stores or people who work in land here abroad. Worse still it forces them to plow in there or otherwise destroy millions of tones of perfectly edible food.
SOUNDBITE [English] Andrew Simms, Author of Tescopoly: “There is no doubt that when these kind of whimsical criteria does to do with what the supermarket wants to sell, when it wants to sell it and what it wants to look like that when those things replies, there is no doubt that it results in absolutely mountains of waste of perfectly good food which could be a dinner for someone and would be a livelihood for the person who produced it.”
Narration: And all this in a country where millions can barely afford to feed themselves adequately or healthily. In 2012 a study found 1 in 5 mothers would regularly miss out on meals so as to be able to ensure that their children weren’t hungry. According to a March 2013 report teachers in London schools saw that at least 5 children per class turned out without having breakfast. With 41 Percent of teachers saying that they believe that children’s hunger lead to symptoms such as fainting. In 2012 some 2 hundred thousand Britons needed provisions from food banks about double the number from 2011.
SOUNDBITE [English] Jane Collins, Former Supermarket Manager: “A lot of people that are on wages actually do rely on food banks themselves. Or some sort of, looking for a bargain at the end of the day in the supermarket to buy their food. They get the reduced prices if they can. What they call not the reductions at the end. And it doesn’t seem like the money is distributed fairly and when you think of the work that shop floor staff do and I know a lot of people think shop floor staff don’t work hard but they do.”
This is one monument to austerity Britain a monument that stands in every town center, the length and breath for the land. On one corner of the street a giant supermarket chain paying low wages and destroying food at every point from farm to fridge. On the opposite corner of the street, the food bank, perhaps helping the very people who produce the profits for the shareholders at the supermarkets with enough food for them to make it through another week.