– The grocery industry deliberately exploits the value choice of people who swear by organic food, says economics professor.
Three cauliflowers for the price of one organic in the same store chain. Double the price of organic lemons at competing low-price chains, and generally gigantic price increases on organic alternatives.
This is shown by Nettavisen’s price test of an organic shopping basket at the discount chains, Kiwi, Rema 1000 and Extra.
Prissmell
In our price comparison, we have looked at the price differences for the organic goods at the low-price chains. In addition, we have looked at how large a price surcharge the same item receives in the same store when it is organic.
That organic food is expensive is no news, but that only two of the items in the shopping cart have the same price at all low-price chains is surprising. There are many indications that low-price chains do not compete for the price of organic food.
Also read: Price test of supermarkets: Almost all the goods had different prices
The selection of organic food within the same store chain varies greatly. In addition, there is a big difference between the various low-price chains. Therefore, we had to choose the most common organic foods that everyone sold. The shopping cart was therefore reduced from more than 20 items to 13 items.
You can read the entire price test further down in the case
The online newspaper’s price survey shows:
- Price jump of 110 percent on organic lemons at Extra compared to Kiwi. 116 kroner per kilo instead of 55 kroner per kilo.
- Rema 1000’s organic apples are 17 kroner more expensive per kilo compared to the test’s cheapest at kiwi.
- NOK 12 price difference on organic cauliflower per piece, for the most expensive at Extra, and the cheapest at Kiwi.
- Kiwi is the cheapest on most of the organic items in the shopping cart.
- Extra seems to have one of the better selections of organic foods.
Read the entire price test further down in the case:
Economics professor Tor Wallin Andreassen believes that those who have decided that organic products are better, will buy it regardless of price.
– This is a price segment that is not very price sensitive, he says to Nettavisen.
The driving force behind eating organic can be a value choice, such as changing the world, Wallin Andreassen believes. Many people are also concerned about what they believe is a health benefit when they avoid chemical pesticides.
– The grocery industry consciously exploits the value choice of people who swear by organic food, says the expert.
Also read: Iceland must close 1 out of 5 stores: Feels hindered by the grocery giants
High willingness to pay
– The reason why organic goods are more expensive is because they cost more to purchase, are more expensive to produce, and that there is not as much supply as for other goods, says communications manager, Harald Kristiansen to Nettavisen.
Coop is supported by Kiwi and Rema 1000. They also say that increased production costs for organic food result in more expensive prices in the store.
That is not the truth, says the economics professor. He emphasizes that the astronomical jump in the price of organic food is not associated with higher production costs.
– It is a common argument, but it is not correct, he says.
The economics professor claims that the rigid prices of organic food are related to the knowledge that the group is willing to pay a lot for organic food.
– The stores take out this consumer surplus, and are well aware that price is totally subordinate, he says.
The criticism is loose
– We do the best we can, but mostly get criticism anyway. Either we are accused of price collusion if prices are the same, or we are accused of speculating whether there are price differences. Of course, we do not try to deceive the customers, he says, and adds:
– Everyone who runs a shop must make money, I think the economics professor also understands that. Then he must believe me that Coop’s task, as owned by the customers, is to make it as cheap as possible for our customers. We do this every day, holiday or not, says Kristiansen.
The pressure on price
As mentioned, our price test shows that you get three regular cauliflowers for the price of one.
– What is the reason why you spend almost 20 kroner for the organic cauliflower?
– Kiwi must always have the market’s lowest prices, both for organic and conventional goods. Ordinary cauliflower is often pushed up in price, and then the distance to organic is often greater.
This is what communications consultant Kristine Aakvaag Arvin tells Nettavisen.
– In any case, we will have the best and lowest prices in Kiwi for all our customers, and will work to reduce the distance when we have such campaigns.
Kiwi states that the selection of organic food varies well from store to store, depending on the store’s size, market demand, supply and season.
Also read: The Kiwi duo lived from hand to mouth – now they have a turnover of over a billion
Will increase the volume
Head of communication in Rema 1000, Hanne Knudsen, explains the price differences as follows:
– There are several factors that mean that there are price differences for conventional and organic products. Among other things, it requires a more comprehensive process to grow organic food, larger areas are needed for the crops, and there is a higher waste, because pesticides are not used in production. This makes it more expensive to run organic farming, which in turn affects the prices of customers, she explains to Nettavisen, and continues:
– How large a part of the product range is organic at Rema? Is it a focus area?
– Organic goods form a small but growing part of our range. The selection of organic fruit and vegetables follows the demand from customers, and we see, among other things, that our customers in Oslo and the surrounding area are more concerned with buying organic food than in other parts of the country, she says.
Knudsen states that they are constantly working to increase the selection of organic products, and that many of Rema 1000’s own products are organic.
– In addition, we offer the premium brand Kolonihagen in all our stores, says Knudsen.
Read the full price test here:
- Extra’s minced meat is Coop Kjøttdeig, as they do not carry similar minced meat from Gilde.
- Kiwis and Rema’s minced meat is from Gilde.
- Kiwi’s sour cream is from Rørosmeieret
- Extra’s Light Cream is from Änglamark.
- Kiwi sells organic lemon at a unit price of 9.90 for 180 g. Our price is therefore converted to kilos.
- Rema 1000’s organic eggs from Kolonihaven are M / L / XL.
- Rema 1000 has organic whole milk and light milk from Tine.
- Rema 1000’s organic sour cream and light cream are from Tine, and are 300g, we have converted to 250g.
- Regular Light Cream from Tine at 300g has been converted to a price of 250g in all stores.
- NB! In those cases where it has been possible, we have chosen the most affordable organic alternative.
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