Supermarkets set for organic price tumble

Sales of organic produce will be ramped up in supermarkets, but prices must come down, according to Steve Murrells, Tesco’s director of fresh produce.

In the week before the Soil Association published figures showing organic sales burgeoning, Mr Murrells told a farming conference that organics were on the brink of joining the mainstream of the grocery market.

“We’re at the tipping point on organics.

It will still have a premium, but a premium that is right for consumers to buy.”

But many organic producers are already feeling the income squeeze, according to the NFU’s head of food chain, Kevin Pearce.

He said supermarkets were wrong to focus on driving prices down.

“Ultimately organics cost more to produce.

We need to explore cost structures with the supply chain and make sure people realise the value of organics.”

Helen Browning, director of food and farming at the Soil Association, said growth in organic sales had not been matched by farm incomes.

“The retailers are very lazy to market on price alone.

Squeeze farmers too tight and they will start cutting corners like everyone else, and then the food scares begin to appear.”

She cited Sainsbury’s recent relaunch of its SO organic range as a lesson to other retailers, after sales increased dramatically.

“It shows what you can do when you get the marketing and the packaging right,” said Mrs Browning.

But even Sainsbury’s acknowledges that prices will fall.