New attack on food profit margins
Government's pricing watchdog criticises supermarkets for failing to pass savings on to customers
SUPERMARKETS are squeezing producers for cheaper prices but failing to pass any of the savings on to customers, an official new report has found.
The government's food price watchdog, which was set up by the agriculture minister last autumn, says in its first report that shop profit margins are vastly inflated.
The 240-page study looked at the prices charged to customers and compared them with the wholesale price charged by producers.
It found that even when wholesale prices fell, customers ended up paying the same or more. Supermarket prices as a whole have risen by 2.7% in the past three months.
Dairy produce, meat and fresh fruit were among the groups with the highest margins - around 140% for apples and bananas and 110% for carrots and lettuce.
The report also gives the example of pork loin, on which shops make a 55% margin compared with 39% a decade ago.
The big French supermarket chains signed a deal last summer to cut their profit margins on fruit and veg to help producers when wholesale prices fall significantly.
However, the deal only applies when the government decrees that producers are in a period of "crisis". For most items, wholesale prices have to drop between 20% and 25% for the measures to come into force.
