Switzerland: Is the retail trade keeping organic prices high?

Even though the organic sales of Aldi and Lidl in Switzerland increased by about 50 per cent last year and the two large full-range retailers Coop and Migros also increased significantly: Organic is - as the Neue Zürcher Zeitung (NZZ, engl. New Journal of Zurich) sees it - still a niche. Migros, for example, states that the organic share of its sales is 12 per cent. "It’s supposed to be about the same for the competitors," writes the NZZ.

The author of the article suspects that food traders work with significantly higher margins on organic than on conventional food and argues as follows: The Swiss Federal Office for Agriculture (FOAG) has been comparing the price differences between conventional and organic every month since 2014. The ratio has remained the same despite growing organic sales.

“Over time and with greater demand and higher volumes of organic food, producers and traders should be able to pass on the price advantages to customers,” the NZZ quotes a department head of the consulting company Deloitte. The Swiss Animal Protection also has its say: “We criticise the fact that the prices of label and organic products are not calculated on the basis of the actual costs, but according to the willingness to pay which can be skimmed off in the market.

Retailers reject accusations of higher margins for organic

An accusation that the retailers indignantly reject. Migros tells the NZZ that competition is intense and makes excessive prices impossible. Aldi assures the NZZ: "We make no distinction between conventionally and organically produced food in our pricing." Coop cites the additional costs at all levels and the NZZ itself points to the high customs duties that made organic imports more expensive. However, even if there were no margin differences, the higher prices would also leave more in the retailers' cash boxes, writes the NZZ: "It is therefore no wonder that organic products always occupy the most prominent places on supermarket shelves."