Retailers setting the standards

February 13, 2009

I was told today that a German supermarket chain refuses to purchase fruit and vegetables unless they contain 70% fewer pesticides residues than the maximum residue levels recommended by the EU (looked it up and it seems it’s more than one.)

It’s easy to see why they do it as it’s a win-win for them. While their customers appreciate that they are looking out for them, they don’t actually lose out on any count: in the case of massive retailers, as supermarket chains tend to be, the pressure is on the suppliers to provide whatever they want, at their own cost.

Some observations:

  • It seems that retailers are increasingly “showing that they care” by going beyond what regulation requires of them.
  • In doing so they are dictating the pace of regulation, meaning that rather than play catch-up with regulation, they are setting the agenda. Regulators want to show that they care as much as a voter’s local hypermarket and so often step up to ensure that stringent regulation is put in place that matches that which retailers are doing. And the cycle continues.
  • As mentioned above, it’s easy to see why they do it: 1) consumer sensibilities being what they are, retailers need to show that they care about their concerns – health, safety and environment above all; 2) most of the cost of this falls onto suppliers who dream of getting a deal with Tesco or Carrefour etc. and will do whatever it takes to please.

Is this a good thing? Potentially, yes. The highest standards for health, safety, protection of our surroundings and so on is pretty high on most of our wish-lists. However, it’s easy to see this getting a little out of hand i.e. a little too political. I don’t have a dozen case studies at my fingertips, but returning to the example from the opening paragraph, I know that maximum residue levels for pesticides in fruit and veg in Europe are the lowest in the world already, and that lowering them by a further 70%  raises all manner of problems for farmers expected to provide enormous quantities of high-quality produce.

Moral of the story? The big retailers are arguably one of the major players in shaping the current regulatory environment: they can potentially do a lot of good, but they should act responsibly rather than as if they were trying to win a popularity contest.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s