European grocery discounter Penny is charging higher prices – in some cases, much higher – for nine staple food products for one week to highlight the environmental impact of food production. The retailer says it hopes the campaign – which will run in all of its 2,150 stores – will start a Europe-wide conversation about the ‘true cost’ of food.
The initiative directly compares the environmental impacts of conventional food products with their organic equivalents, and will be watched closely by the organic sector which sees ‘true cost accounting’ as a powerful tool for food systems transformation.
Penny (part of the REWE group) has collaborated on the initiative with the Technical University of Nuremberg and the University of Greifswald, who between then have calculated the difference between the current market price and the true cost price of the products in the trial. In the true costs, the scientists included the impact of soil, climate, water, land-use and health in the final sales price. As well as conventional and organic meat and dairy products, Penny has included a vegan schnitzel.
Information on the way the products have been ‘re-priced’ are available at point of sale (on-pack and on shelf talkers) and online. This gives a product’s normal current selling price, true cost premium, true cost mark-up percentage and the true cost selling price. The organic foods surveyed have environmental follow-up costs of an average of 1.15 euros, the conventional ones of 1.57 euros on average, and the vegan schnitzel of 14 cents.
Looking more closely at the organic-conventional comparisons, Penny’s data shows that an organic fruit yoghurt incurred a +31% true cost premium (+38-45% for the conventional equivalent), organic cheese slices had a +69% premium added (94% for conventional) and organic sausages had a +63% premium added (+88% for conventional sausages).
Penny says it will donate the difference between the current market price and the true cost price to farmers and growers.
Stefan Görgens, PENNY COO, said at a press conference today: “We see that many of our customers are suffering from the persistently high food prices. Nevertheless, we have to face the uncomfortable message that the prices of our food, which are incurred along the supply chain, do not reflect the environmental costs. We want to create awareness for this with the national campaign on the true costs. We also want to show solutions together with the Technical University of Nuremberg and the University of Greifswald.
Dr Amelie Michalke, sustainability scientist at the University of Greifswald, said: “This is not about immediately introducing the true cost of all food. There is a lack of comprehensive scientific foundations and answers to central questions of social justice. We hope for a strong impetus so that we can discuss and consider food prices in a different and (polluter-pays) fairer form,” adds Dr. Amelie Michalke, sustainability scientist at the University of Greifswald.
All images and graphics, Penny