The Iceland supermarket chain, which was the first to ban genetically modified (GM) ingredients from its own brands in the UK, have bought up nearly 40% of the world’s organic vegetable crop to meet growing demand. More surprising is the announcement that the chain have promised to absorb all extra costs, and promise their customers organic foods at current non-organic prices.
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At the same time, Iceland is also pledging to help increase organic acreage in England, Wales and Northern Ireland through pioneering a new partnership with the National Trust, the UK’s biggest landowner. Both schemes show a high level of commitment to environmental and public health issues – a far cry from the days where a tree icon and ‘recyclable’ stamp on packaging was considered proof of environmental responsibility.
A £1m investment has been made into the National Trust, for a project to develop more organic produce, which will support the National Trust’s “whole farming planning” programme. This works with the charity’s tenant farmers to develop environmentally responsible farming practices and opportunities for diversification, including the potential for organic conversion.
The company’s investment plans mean profit margins may be down by several million pounds by the end of 2001, but it was a long-term investment prompted by a survey that suggested three out of four customers would prefer to buy organic goods if they were cheaper than current prices.
Frozen vegetables will be the first converts and the new scheme will set the organic products at the same price as average supermarket own-label products.
At present, only 3% of UK agricultural land is organic and all the supermarkets are forced to rely heavily on imports to meet demand.
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By GlobalData Sainsbury’s is believed to have bought up sites on Caribbean islands to guarantee its supplies.
But with 40% of the organic crop sown up, Iceland’s investment could act as a spur to the rest of the food industry, increase competition and cut prices even further. The precedent of not passing on extra costs to the consumer is a powerful one – and may well have other chains rapidly rethinking their anti-GM strategy with regard to pricing.
Previous initiatives by the chain, which has 760 stores in the UK, such as the GM food ban were widely welcomed by environmental campaigners like Friends of the Earth. The introduction of a range of environmentally-friendly fridges and freezers were the only products to gain endorsement by Greenpeace.
Currently Britain has minimal organic production due to lack of Government investment in the organic industry in it’s formative years, the new scheme may put pressure on the government to give more financial help to would-be organic food producers.
