Fairtrade campaigners have expressed their alarm at the announcement by Asda Wal-Mart that it has slashed the price of loose bananas by approximately 17p per kilogram (kg) to 68p per kg.
The Fairtrade Foundation says it will inevitably hit some of the world's poorest people hard.
This move has triggered another round in the ongoing price war on bananas between supermarkets and has already been followed by Tesco.
The latest cut represents a 36% fall from 2002 when bananas where sold at around £1.10 per kg.
Fairtrade campaigners say that regardless of whether supermarkets take the ‘margin hit’ themselves in the short term, there’s no doubt that moves to reduce basic banana prices will inevitably create pressure on suppliers down the chain.
Over recent years, falling banana prices have resulted in severe hardship for the producers involved, forcing smaller farmers out of the market and undermining efforts to improve environmental sustainability and working conditions on larger plantations.
The move by retailers is a repeat of 2006, when Asda led moves to cut prices as low as 64p per kg – again followed by other retailers. However, in the four weeks following last year’s move, volume sales of bananas overall actually fell 7.9%, according to TNS data reported in industry newswires, whilst expenditure was reduced by 23.9% and customer penetration fell by 10%, wiping an estimated £7 million of value off the category as a whole. This would suggest that price cuts are not only damaging to farmers and workers, but also unnecessary from a consumer point of view.
In a statement the Fairtrade Foundation said: "The Fairtrade Foundation is disappointed that consumers are being misled into assuming that 68p per kg is a sustainable price, when that is clearly not the case, and that this move opens up a price differential between conventional bananas and Fairtrade certified bananas (as well as organic certified fruit) that regrettably creates more confusion amongst shoppers on the pricing issue.
"The only way that consumers can be sure that the price cuts in shops do not result in pay cuts for banana growers is by choosing bananas carrying the FAIRTRADE Mark. This ensures that producer organisations receive an agreed, stable price for their bananas as well as a premium to invest in improving the future for their farming organisations and local communities. We applaud recent moves by Sainsbury’s and Waitrose to switch all their bananas to Fairtrade, and encourage shoppers in other major supermarkets to support this positive example by choosing Fairtrade bananas when they shop."