Living banana prices – Lidl to pay surcharge to plantations in future

Lidl has announced that it will pay this surcharge for its entire range of bananas from plantations - both Fairtrade-certified organic bananas, conventional Fairtrade bananas and bananas bearing the Rainforest Alliance seal. At the same time, the selling price is to remain the same. Together with the suppliers, Fairtrade and Flocert, a "system has been developed to ensure that the required price premium for living wages is accurately determined and paid to the plantations by Lidl and its business partners," the company writes: "In a four-step process, the wage situation is first analyzed, the reference price for living wages is determined, its payment is randomly checked up to the level of the plantation and the passing on of the premium to the workers is independently monitored."

What are Living Wages?

Lidl and its partners don't have to reinvent the wheel. More than ten years ago, sociologists Richard and Martha Anker developed a model to calculate regional living wages in the countries of the South - differentiated by country or city and by different sectors. According to Fairtrade Germany, a wage is considered living wage "only if it not only covers the costs of basic needs such as food, water and housing, but also allows for expenses for education, medical care, transportation, clothing and reserves for emergency situations." In the meantime, a large number of studies have emerged that calculated such Living Wages - and showed that the respective applicable state minimum wages were usually far below them.

This also applies to many wages and producer prices paid for organic and Fairtrade products. The Dutch importer of organic fruit and vegetables, Eosta, has been addressing the issue for years. Furthermore, the organic industry has hardly addressed the issue, while Fairtrade in recent years has taken steps to achieve Living Wages. For the banana sector, Fairtrade International set a basic wage for plantation workers in December 2020. It came into force in July 2021, amounts to at least 70 percent of the regional Living Wage and is to be increased gradually. In countries far below this base wage - such as the Dominican Republic, the most important supplier of organic bananas - this means an increase of up to15 percent for workers, Fairtrade International wrote.

Not only Lidl is acting

Lidl's approach has opened doors for Fairtrade and is being praised accordingly: "The company is the first retailer to take far-reaching steps to improve the wage situation in the banana sector," writes Fairtrade Germany, but qualifies: "For workers on banana plantations to actually receive a living wage, other companies would have to follow suit. Only if each company pays a proportional price premium can the achievement of a living wage be ensured."

In the Netherlands, several supermarket chains have joined forces to achieve Living Wages for bananas. The British retail chain Tesco has already been paying a Living Wages premium for bananas since January 2022 and has announced that from January 2024 it will only buy from plantations that demonstrably pay their workers Living Wages. Also, in the organic sector, the Dutch fruit and vegetable importer Eosta is actively working on and communicating the issue.