2 cents per cucumber

Seasonal, regional, local: Migros and Coop like to advertise with fresh Swiss vegetables. When customers buy local produce, many think they are supporting local farmers. However, a study by the French-speaking Swiss consumer association (Fédération romande des consommateurs), which examines the pricing policy of Coop and Migros, paints a different picture. It shows that when it comes to vegetables, only the smallest part of the sales price goes to local farmers.

After deducting all costs, a Swiss farmer earns only a few cents on a cucumber that costs an average of 1.80 francs in the store. In 2021 he had an average of 13 cents left – in 2022 that will only be two cents due to the increased prices for fuel and fertilizer!

If you consider that without farmers there would be no cucumbers for sale, that is very little money. The authors of the study see the reason for this in the high margins of Migros and Coop.

“It cannot be the case that farmers have all the risks, but earn almost nothing from their products,” said Sophie Michaud Gigon (47), green national councilor and director of the Italian consumer association.

Michaud Gigon refers to the research results showing that the production cost of a cucumber, which costs 1.80 francs in Migros, is 96 centimes. Intermediate costs, such as for transport, run up to 28 centimes; the farmer’s net income, as mentioned, is two centimes. That leaves 54 centimes going to Migros.

The major distributors do not disclose margins

How high the margin is on these 54 centimes – Migros also incurs costs, such as wages for sales personnel – remains unclear: the retailer has not provided the authors of the study with any information.

When asked by SonntagsBlick, the orange giant is also silent on this subject. “Like any other company, we don’t disclose margins for individual items,” Migros replies, but combines this with a comment: “We couldn’t afford excessively high margins given the tough retail competition.” Migros’ profit margin is modest around two percent. In addition, a “partnership relationship” is maintained with the farmers.

Coop reacts the same way. As a cooperative you make a profit of 1.8 cents per franc of turnover, the company reports. That is little compared to profit-oriented companies. And: “Because of the tough competition” they give “not really any information” about the margins of individual products. Coop’s suppliers received a “fair and market-oriented price”.

There is no real partnership

One thing is certain: thanks to their market power, the large distributors have more power. “Most companies sell them 80 to 90 percent of their lettuce, tomatoes and cucumbers,” says vegetable grower Urs F.*, who wants to remain anonymous for fear of reprisals. According to F., the “partnership” that Migros and Coop would maintain with the local producers is “purely an alibi exercise”.

An example: When F. tried to talk to the representative of the local Coop branch about adjusting prices because of the exploding fuel and fertilizer costs, he was fired outright. He recalls, “His response was, ‘If you have higher costs, that’s not our problem.'”

Swiss seasonal vegetables more expensive than imports

The research, in turn, contains another surprising finding: customers pay higher prices for Swiss seasonal vegetables than for imported goods.

This has to do with, among other things, border control. When tomatoes are in season domestically, foreign tomatoes can only be imported to a limited extent. This allows Swiss farmers to charge higher prices during that period. In this way, they absorb the deep merit they receive during the rest of the year.

According to the authors of the study, another part of the higher prices can be explained by the too high margins of Migros and Coop. The companies benefited from consumers’ willingness to buy local vegetables – beating high margins on the higher prices. The retailers do not want to go into detail here either.

The losers are farmers and consumers

Consumer lawyer Michaud Gigon regrets this and criticizes the prevailing lack of transparency. “The losers in the current situation are the farmers and consumers,” she says. The Greens politician calls on the federal government to create transparency around retailers’ pricing policies and margins. She refers to France, where farmers carried out state market surveillance years ago.

The woman from Vaud is not alone in her criticism. This week, the Economic Commission of the Council of State addressed the negative effects of market concentration in the retail sector and is demanding a report from the Federal Council. The goal should be to increase “transparency in pricing”.

Exactly what consumer advocates demand. Greengrocer F. would also welcome this. He doubts that retailers will provide information about their margins. But he also says, “Anything is better than what we have today.”