Consumers face much higher costs for free-range, fair trade options

Fair trade coffee is only about 5 per cent of Countdown's sales.
PETER MEECHAM/FAIRFAX NZ

Fair trade coffee is only about 5 per cent of Countdown's sales.

You're cruising down the supermarket aisle, trying to get everything into your trolley as fast as possible before one of your children has a meltdown.

You stop at the shelves containing eggs.  There's a bog-standard dozen Farmer Brown eggs for $3.80 – or a dozen Animal Welfare Foods free-range for $8.80. What do you choose?

If you are on a budget, it can be a difficult decision to make.

A comparison of prices at Countdown this week.

A comparison of prices at Countdown this week.

A comparison of a basket of Countdown shopping this week showed a consumer would pay about twice as much for the organic, free-range and fair trade options as they would if they took the cheapest options available.

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Katherine Rich, chief executive of the Food and Grocery Council said price was the number one factor for people deciding what to add to their supermarket shopping.

"Eggs are a really good example. There can often be quite a big gap between what people say they want and what they do in the store. It's not questioning their sincerity or their aspirations when they walk in but particularly with eggs, free range is usually double the price of others, it's quite a big price differential."

But free-range is becoming more popular – Countdown says about 40 per cent of the eggs sold are free-range or barn eggs, of which it is estimated 20 per cent are free-range. Twenty per cent of the chicken meat sold is free-range.

Consumers are voting with their wallets for other principles, too. A spokesman for the supermarket chain said fair trade coffee made up about 5 per cent of sales, up from 3.5 per cent a year ago. "This includes brands like L'Affare which use fair trade beans but don't necessarily call themselves out as fair trade coffee."

New Zealand has no rules about what free-range, fair trade or organic has to mean on labels.
123RF

New Zealand has no rules about what free-range, fair trade or organic has to mean on labels.

Rich said it would likely take a price change for the free-range and fair trade options to become as popular as mainstream varieties.

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Another area where some people are prepared to pay more is for organics. Sales of organic groceries, excluding fruit and vegetables, have climbed 147 per cent since 2012 to $167 million last year. Almost three-quarters of people buy organic products at least some of the time, Consumer NZ says.

But even if you are willing to fork out the extra, how can you know that the prices are fair?

Katherine Rich, of the Food and Grocery Council, says price is the biggest driver of shopping decisions.
TIM HALES/STUFF

Katherine Rich, of the Food and Grocery Council, says price is the biggest driver of shopping decisions.

Barry Coates, a former executive director of Oxfam and a sustainability advocate at the University of Auckland, said in some cases, what was being charged for the 'feel-good factor' was unfairly high.

He said there was more margin being made on fair trade products, because while the producers of a product such as coffee would be paid more in a fair trade situation, there were fewer people in the supply chain taking a cut.

"The price the coffee roaster is paying is not significantly higher than they would get from conventional trade even though a better price is paid to the producer.

"Fair trade is not costing much more or in fact any more but because it's a different product you see the price charged on the shelves of retailers is higher."

He said retailers should act responsibly and not try to benefit from consumers trying to do the right thing by buying fair trade options.

"I'm aware of the same criticism in organics. The mark-up is higher than the mark-up they would get from conventional products. Consumers should put pressure back on retailers to make sure they are not using these product categories to create more money for themselves."

He said the only reason no one complained was that shoppers assumed the extra price went to the producers, "not the pockets of retailers".

But Andrew Murphy, of Massey University's marketing department, said it might not be such a cynical decision by shopkeepers. He said when the market for fair-trade products was smaller than conventional options, a higher mark-up might be necessary to make it pay.

A Countdown spokesman said its margins were commercially sensitive. Foodstuffs did not have anyone available to comment.

Jessica Wilson, of Consumer NZ, said her organisation was most concerned about ensuring that free-range and organic claims on packaging were legitimate.

Apart from a general requirement not to mislead consumers, there are no rules about what free-range, fair trade or organic on labels have to mean.

She said if a shopper was looking at a product that claimed to be organic, they should check that it had trustworthy accreditation.

 "These types of claims are growing and we would like to see clearer guidelines around what the manufacturers are claiming and clearer standards. It shouldn't be up to consumers to decipher lengthy ingredients lists."

Consumer cites an example of Stepout Nature Socks, which carry a "certified organic cotton" logo on the pack that is not a logo of any certification scheme.

The socks are 20 per cent nylon and 5 per cent elastane so even if all the cotton is organic, that is still only 75 per cent of the product. They are $15.99 for two pairs, compared to $6 for a three-pack of standard socks. 

* An earlier version of this article contained an incorrect price for free-range chicken and fair trade bananas.

 - Stuff

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