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Ms Anttila's war on food prices
by Thanos Kalamidas
2009-09-24 07:49:29
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This was on the news last week but I have to admit that I’ve been waiting patiently to see if anybody was going to react or at least say something about it but ... seriously, absolutely nothing! The Finnish agriculture and forest minister, Ms Sirkka - Liisa Anttila said in an interview for the national broadcaster that she was planning to release a report by the end of the year – and keep it religiously every year from now on – where she will show who has benefited from the ongoing increase in food prices.

Before I continue to explain why I was so amazed with what she said, I have to admit that most of the other things she said she was absolutely correct about, and perhaps she should say much more. Ms Anttila pointed out that marketing, especially the increase in marketing over the last couple of years, is one of the main reasons for the increase in food prices. Especially now that the producers have no direct access to the consumers but everything goes through giant cooperatives and retails.

We often forget that all the televised advertisement – which it is a lot – gets added to the price of the products. Supermarkets often argue that their profit percentage of the price is very small, and it is true to a point. But what they forget to mention is where their real profits come from. Let’s see, when you walk into a supermarket you notice that a certain beverage has a whole alley, while the rest have just a small space. Actually the supermarket gives every brand the same size place, but then the companies can buy more space. So you see one beverage having one meter and the other twenty meters. The company has paid for those extra nineteen meters!

Then add the adverts and all the brochures you probably get home from supermarkets and the retail industry. Of course they come under the logo of the supermarket, and if you ask them they will argue that it is the companies that pay the expenses. But you can be sure that the supermarkets profit even from the brochures you most of the time send straight to the rubbish bin. On the topic of profit; after it’s clear that the industry adds the price of all those expenses on the products, let’s go to the supermarkets’ profits.

The retails profit not only from the space they sell to the companies, but they profit from the marketing they do. It’s getting a bit tricky now. The companies don’t pay all expenses to the supermarkets in real money, but they pay in products. The beverage company that bought the extra nineteen meters paid in drinks that the supermarket sells. But the supermarket charged the company with the same price they usually buy from them, and of course after they put them in the shops the same price they usually sell to the consumers. Can you imagine what unbelievable profits we are talking about? Profits on top of profits!

Then again, just like banks the industry is not a philanthropist organization but a profitable cooperation, and the cost of the space in the supermarket and the cost of the adverts and brochures are paid by the consumer. Sometimes this adds up to 12-15% on a product. If you add to that the usual 7% the supermarkets add for their …marketing expenses – remember everybody else has paid those expenses in the meantime – you end up with the cost of marketing being over 20%. The rest you can calculate yourself and understand how much food marketing costs the consumers and how much cheaper the milk would be if there was a control there.

But whose job is it to control the company prices and profits if not the state? Is it not part of Ms Anttila’s job description? What the retails and the industry are doing is not illegal, but it is unethical and it is her job to make it illegal; make the unethical illegal. It is not my job and by saying that she’s planning to release a report at the end of the year, pointing out the companies that have been unethical – it is like she expects me and all the consumers in Finland to do something about it. Does she expect the Finnish consumers to gather around the office of the beverage company or a tooth paste company, and start breaking everything – or people rioting in supermarkets because their profit was unethical?

What I would expect from Ms Anttila at the end of the year, is a report on how many companies were punished for their unethical acts. The government should create a legal net to protect consumers from unethical acts, without pointing finger. That’s her job! That would excuse the war she started and it would give her the support of the people …ethically!

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