After it emerged that Aldi will cut the amount it pays for bananas next year, a coalition of South American banana growers has warned that the price they receive from European retailers is unsustainable.
Aldi has signalled that it intends to reduce the fixed price it pays by €0.06 cents per kilo in 2021, according to data supplied by the group of exporters from Ecuador, Colombia, Guatemala, Honduras, Panama, and Costa Rica. It is understood that the reduction has been implemented by Aldi’s central procurement function and will apply across all European operations.
The coalition noted that as the largest customer for LatAm bananas, Aldi’s pricing policy is essentially a benchmark that is followed by other retailers across Europe. Lowering the price paid to banana growers carries a high cost for producing regions. The main social objectives at risk are the living wage, employment, social fabric, and rural development.
According to the coalition, the decision made in Europe will contribute to rural poverty and has the potential to undermine social cohesion in rural communities in Latin America. Ambassadors of the countries involved have reached out to their European counterpart to raise concerns.
The Rainforest Alliance, which operates a certification scheme that many European retailers require banana suppliers to participate in, agrees that banana growers are being squeezed between rising costs and lower prices.
The coalition is calling on European retail majors to attend a routable meeting for crisis talks.