FRFI 153 February / March 2000
Britain's supermarkets – food imperialism
Faced with the growing demands of British consumers for high-quality organic fruit, Sainsbury is planning to invade the Caribbean island of Grenada, to take over and convert most of its good quality agricultural land to organic production. It will do the same on four large farms in St Lucia. Sainsbury will not own or farm the land itself, but will have total control of all aspects of production and distribution.
To sustain its profits in the increasingly cut-throat British food market, Sainsbury needs to ensure a ready supply of high-quality, 'healthily' grown bananas, passion fruit, coconuts and mangoes for its stores. Caribbean agriculture is in dire straits, unable to compete in a global farm economy increasingly dominated by imperialist multinationals and policed by imperialist institutions like the IMF, World Bank and World Trade Organisation (WTO). Caribbean small farmers are being driven off the land and rural communities are destitute. Grenada, with 16% unemployment and 65% of its population dependent on farming, is in no position to resist this invasion by Sainsbury. This is the other side of the good quality, healthy, increasingly exotic and relatively cheap food supplied by highly profitable British supermarkets to middle class and, more recently, increasing numbers of working class consumers. This is a new era of food imperialism. 1
Between 1970 and 1994, exports of foodstuffs from underdeveloped countries increased more than seven times from $16bn to $117bn, or 31% of globally traded food. About 30% of British food and drink imports come from underdeveloped countries. The terms and conditions of work on plantations and farms producing this food are often barbaric.
In 1995, 515 million bananas worth £300m were imported into Britain. 70% of banana sales were in supermarkets. In Colombia, violence against banana workers is widespread. Paramilitaries are employed by large landowners to rid the banana-producing areas of workers who try and organise to improve their conditions. 400 workers belonging to the main banana union Sintrainagro were killed in 1995 and a year later their deputy general secretary, Osvaldo Olivo, was murdered. That year own-brand mini-bananas from Colombia were being sold in both Sainsbury's and Waitrose.
65% of imported bananas came from the Caribbean region in 1995. They are produced on small family farms on hilly islands and have high production costs. Preferential treatment of imports of these bananas has now been ruled out by the WTO in the interests of 'free trade' and as a result of the recent trade conflict between the US and EU. Faced with unequal competition from US multinationals producing in Latin America on large plantations, many of these farms, already under financial pressure, will not survive and the livelihood of the many workers and their families will be destroyed. In this way, decisions by the WTO open the door to multinational conglomerates like Sainsbury to invade the Caribbean to take over agricultural production.
High profits, cheap food, and abused workers
Whether it is tea from Sri Lanka, asparagus from Peru, pineapples from the Dominican Republic, prawns from Thailand or coffee and grapes from Brazil the picture is the same.
185 million cups of tea a day are drunk in Britain. One of the main producers is Sri Lanka which exports 95% of its tea production, about 17% of this to the EU. Many tea workers live in low-quality housing in overcrowded rooms – it is not uncommon for a family of five or more to be squashed in a one-roomed house and ten houses to share one water pipe. There is a almost complete neglect of the health and education of the workers.
Britain is importing record amounts of asparagus, six times more in 1996 than in 1980. 26% of this comes from Peru. Most of the women (90% of the workforce) who work in the asparagus industry in Peru could never afford to buy it and have never tasted it. The average daily wage in 1996 was £2 – not enough to feed a family a meal. Some of the women, engaged in demanding work, have become sick with tuberculosis. They get no medical help and are sent home, which means they don't get paid.
In addition to poor working conditions, starvation pay, inadequate housing and transport, workers in pineapple, coffee and grape production face lack of protection from large use of pesticides and other chemicals needed to meet the quality and quantity of such products for European markets. Headaches, nausea, skin sores and dizziness are widespread and medical facilities are inadequate or non-existent or must be paid for. The chemicals and feed in commercial prawn production lead to widespread social and environmental damage through salination of soil and water supplies and cause increasing hardship for the local farmers and fishing communities.
Whatever is happening on the ground, the supermarkets don't lose out. Typical are tea bags from Sri Lanka. While UK manufacturers' cost and profits represent 45% of the price and supermarkets' mark-up 30%, plantation workers' wages are only 7%. A bunch of grapes from Brazil, costing £1.42 in a supermarket, is made up of 47p for the supermarket, 40p UK distribution costs and taxes, 25.5p to the plantation and 27p other Brazilian costs, with only 2.5p going to the workers in Brazil. This is the reality of food imperialism. 2
Competing for profits
British supermarkets are very profitable. Profit margins range from 5% to 7% compared to 1.5% in Germany. Four supermarkets control 64% of the £60bn grocery market. Tesco has the largest share 22%, followed by Asda with 16.53%, Sainsbury 16% (it was number one in 1996) and Safeway 9%. The most profitable supermarket was Tesco making a massive £881m pre-tax profit for the year ending February 1999. Sainsbury's pre-tax profit at £756m was barely higher than last year and lower than the £810m it made five years ago. It has announced job cuts of 1,100 workers in the face of what it considers poor results.
Sainsbury is under a lot of pressure to produce better results. The recent £6.7bn takeover of Asda by the US retail giant Wal-Mart will increase this pressure. Wal-Mart has threatened a price cutting war – when it took over a supermarket chain in Germany it cut the price of 50 best selling products by 30%. With the soaring demand for organic foods now even among lower income shoppers, it says it will reduce the price of some organic products to those of non-organic ones. This will increase the pressure on all other supermarkets where prices of organic foods are typically 20-30% higher. Producers will be forced to cut the costs of organic production as supermarkets fight to defend their profit margins. 3
Sainsbury's invasion of Grenada now begins to make sense. It might have signed up for the ethical trading initiative, but, in reality, it will be the people of Grenada who will be made to pay for the lower prices of organic products demanded by a highly profitable and increasingly competitive British grocery market. High profits for the supermarkets, cheap fruits for the British consumer paid for by the toil of the producers in underdeveloped countries – this is food imperialism.
1 Sainsbury's invasion of Grenada was reported by John Vidal in 'Supermarket isle' The Guardian G2 19 January 2000.
2 This and much more information can be found in The global supermarket Christian Aid 1996. Christian Aid and other pressure groups used these facts to put pressure on supermarkets to adopt an ethical trading initiative to improve the social, environmental and working conditions of those producing such products. A later publication Taking stock: how the supermarkets stack up on ethical trading 1999 assesses their inadequate response.
3 Articles on supermarkets: Electronic Telegraph 3 June, 12 July, 8 August 1999, Guardian Unlimited Archive 23 January 2000.