The German food retailing is known to be the toughest market in the world. Prices have to be literally beaten down if one wants to stay in business. Slogans like “Keiner ist billiger” (Nobody is cheaper) and “Geiz ist geil” (Stinginess is cool) are all over the place. On the other side of the picture are the producers, the workers and the suppliers; they are the ones who pay the price.To reduce the market power of big supermarket chains is the basic idea of the recently launched German initiative Supermarkmacht (literally power of the supermarkets). They show how these companies have a strong environmental and social impact by producing and selling goods. With their big purchasing power they can indirectly and directly decide how things are produced in Europe and elsewhere.
A misuse or abuse of this power has to be avoided, the initiators state. In Germany, five big supermarket chains (Edeka, Rewe, Aldi, Lidl und Metro) control around 90% of the market (45% in food retailing). Since supermarkets have the role of “doorman” in the food trade, everything passes through their control. What is needed is someone to control them.
The initiative mentions some examples of unfair pratices which are used by the supermarkets to control their supply:
- Slotting allowance: suppliers need to pay fees if they want to deliver goods. These fees vary according to the spot in which the products will be displayed.
- Threats of dropping products if the conditions of the supermarkets are not met.
- Retrospective changes in conditions which make suppliers pay five to six digit amounts without getting return services.
Minimal prices have strong side-effects. They are passed along the supply chain not leaving any space for human rights and ecological standards. Wages which are not enough to survive, prohibition of labour unions and inhuman working conditions are just some of the results of these practices. (More on food which is too cheap.)
For all these reasons, the initiative asks for the supermarket chains to provide and ensure:
- 1. Humane working conditions.
- 2. Free election of the workers’ council and unhindered working of the councils.
- 3. Ecological minimum standards on the whole supply chain.
- 4. Agreed wages customary in place for all hours worked.
- 5. An end to the unfair purchasing practices of the supermarket chains.
- 6. Obligation for supermarket chains to inform about implementation of working rights and human rights by their suppliers.
The initiative takes the example of the pineapple (in German) to show how standards for supermarkets influence every part of the supply chain. They control which standards are in use in the places that produce their products. It is time supermarkets use their power in a positive way. That is the way to go.
Furthermore, the idea is to achieve a much higher level of transparency. In that way we as buyers are empowered to make concious choices of what to buy. We know where it comes from and how it has been produced.
You can join the cause by adding your signature (German, Austrian and Swiss citizens) or by finding an organization doing a similar work in your area. (And please let me know about them!)