In the UK, retail giant Asda has dropped the prices of its bananas to their lowest level for 14 years, a decision which it said had been made to help consumers cut costs during the economic downturn.
However, the move has led to anger among fellow retailers and banana suppliers, who have said that the Wal-Mart owned group is attempting to create a pointless price war', according to a report in UK newspaper the Daily Mail.
The price cuts have meant that Asda is now charging £0.46 (€0.50) per kg, down from £0.84 per kg on 25 August and £0.99 per kg in December 2008. This has forced competitors such as Tesco and Sainsbury's to match Asda's offering, with a concern in the industry that shoppers will expect low prices and the cost will, eventually, be passed on to growers.
'Our job is to do all we can to help cut the cost of living for families across the UK, and there's no better way of doing that than by lowering prices on core staples that go into millions of shopping trolleys every week,' Alex Brown, Asda's produce director, told the Daily Mail. 'We're footing the bill so we can guarantee the move won't have any impact on the price we pay our suppliers.'
However, one industry expert called the price reduction 'ridiculous', while another said that the move was a ploy to put pressure on competitors' profit margins, with the likes of Tesco selling twice as many bananas as Asda.
'If it is costing Asda £500,000 per week then it will be costing Tesco £1m, and Sainsbury's (which only sells Fairtrade bananas) must be hurting big time,' the source told the publication.
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