German retailer Penny charges the environmental ‘true price’ for its products

by time news

2023-08-03 18:15:52

Since Monday July 31, customers of the approximately 2,150 Penny supermarkets in Germany must have had a little shock when passing by the refrigerated shelves. Throughout the week, the number three German food retailer, known for its bargain prices, applies the “real environmental prices” to nine of its products. Yoghurts, cheeses, sausages… for six of the nine references in its distributor line, the labels jumped by at least 50%.

The action, which is causing a stir in Germany where food is very cheap, is part of a research project, funded by the federal government, and for which the brand Penny, a subsidiary of the heavyweight Rewe, had volunteered in 2020.

Take into account the cost of ecological damage

To estimate the environmental cost of each product, a team of scientists from the University of Greifswald and the Technical University (TH) of Nuremberg calculated the cost of the ecological damage generated by the production of each ingredient, taking into account impact on the climate, but also on the soil, water resources and even on human health.

The methodology, described in an article published this year in the journal Journal of Cleaner Productionis based on generic data provided by the German Federal Office for the Environment or by the IPCC, a group of world experts on the climate. “We want to show that agriculture, like the production of mobile phones or t-shirts, generates environmental costs that are not passed on the label, explains Andreas Krämer, spokesperson for Penny. We are already paying this bill, whether through rising insurance premiums, air pollution, floods, and droughts. »

Engage society and public authorities

Not surprisingly, plant-based foods have lower environmental costs than milk and cheese, and of course meat. Example: these 400 grams of Vienna sausages, the price of which has almost doubled to €6.01. As for organic foods, they show a much lower additional cost than that of their conventional counterparts.

For Tobias Gaugler, resource economist associated with the initiative, the week of “real prices” should make it possible to challenge society and public authorities. “If agricultural subsidies were coupled with ecological services, we could prevent the appearance of this environmental damage and thus the need to pass it on to customers”observes the researcher from TH Nuremberg.

Like various NGOs and the Federal Minister of Agriculture Cem Özdemir (The Greens), the latter also advocates a reduction in VAT on products that are less harmful to the environment, so as to protect farmers and low-income households. , who would be most “penalized” by this “true price” approach.

Some praise and a concert of criticism

But Penny’s initiative, seen as a ” first step “ by associations for the defense of consumers and the environment, has not failed to arouse a flood of criticism. The main farmers’ federation denounced a “ecological bleaching operation on the backs of peasants” from a group (8.8 billion in turnover) fighting hard with Aldi and Lidl on prices.

Other observers have pinpointed a communication operation concerning only nine of the group’s approximately 3,000 references. That week Penny was also selling chicken thighs by two kilos on sale for €5.99.…

A study on how customers react?

“We believe we have the right to launch this fundamental discussion”, replies Andreas Krämer, who specifies that the additional revenue earned by the company will be donated to a foundation intended for farmers embarked on an ecological transition of their farm. With the study of the data collected in the 2,150 participating supermarkets, the retailer’s spokesperson also hopes “a study that will be authoritative, perhaps for Europe, on how customers react. »

With or without ulterior motives, the group has in any case not chosen the most representative week: it is the only one where all the Länder are on school holidays this summer. Tobias Gaugler is aware of this but believes that the initiative makes it possible to reach a large number of people, “including customers of a discount brand, who may never have faced this problem”.

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Germany, home of hard discount

In Germany, frequenting hard discount is cultural. These supermarkets, which offer products at bargain prices, grab 40% market share across the Rhine. Among the best-known brands are Aldi, Lidl, Netto, Penny, Markt, Kik and NKD.

In comparison, the tricolor hard discount market remains far behind, with only around 10% market share. But since the Covid and the war in Ukraine, which led to food inflation of more than 12%, low-cost brands have made great progress in France.

Several of them have even started in recent months to conquer the French market: the Brazilian Atacadão, the Spanish Primaprix, the German TEDi, or even the French Toujust.

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