Every week supermarkets and discount retailers in Germany reel in shoppers with an array of special offers.
According to a recent study by scientists from the University of Augsburg, however, meat, milk and cheese should actually cost much more than they normally do.
Calculations by IT business engineer Tobias Gaugler and his team suggest that minced meat should be almost three times more expensive, whilst milk and Gouda cheese should be priced almost twice what they are currently.
“At the moment, environmental costs are not reflected in food prices. That burden falls instead on the general public and on future generations,” said the scientist.
How true costs are calculated
In a study commissioned by Penny, a discount retailer belonging to the Rewe Group, Gaugler calculated the “true costs” for 16 of the chain’s own-brand products, taking into account not only the “normal” costs but also factors such as greenhouse gas emissions, the consequences of overfertilisation and the amount of energy used in production.
The effect these factors have on food prices is significant – especially when it comes to meat and animal products.
According to the scientists’ calculations, the price of conventionally produced meat would increase by 173 percent if hidden costs were taken into account. In concrete terms: 500 grams of conventionally produced mixed minced meat would cost not €2.79, but rather €7.62.
Normal milk would increase in price by 122 percent, Gouda cheese by 88 percent and Mozzarella by 52 percent. The markups on fruit and vegetables, however, would be much smaller.
Banana prices would increase by 19 percent, potatoes and tomatoes by 12 percent and apples by eight percent, according to Gaugler.
Markups for organic products would be consistently lower than those for conventionally produced goods. But the price of organic meat would still rise by 126 percent if the “true costs” of production were taken into account.
The Rewe Group aims to tackle the issue of hidden production costs by opening a new “sustainability branch” of its Penny discount chain in Berlin on September 2nd. One in every eight conventionally and organically produced own-brand products will have a sign showing the “true price” alongside the retail price.
It is hoped that the initiative will change consumer behaviour. Photo: DPA
The price card for long-life milk, for example, will show the retail price of 79 cents as well as the “true cost” of €1.75, and a 250g pack of organic minced meat will show the retail price of €2.25 as well as the “true cost” of €5.09.
Even if the customer ultimately ends up paying the retail price, Rewe chief executive Stefan Magel sees the initiative as an important first step toward increased sustainability.
“We need to make the costs caused by our consumption clear”, he believes. Only then can a customer make well-informed purchases.
“As a company in a very competitive market, we are undoubtedly part of the problem”, Magel admits. He hopes, however, that taking this step will make them part of the solution.
If customers react well to the double price labelling initiative, then he may increase the number of products involved and further expand the initiative to other supermarket chains.
That would be no easy feat, however: in an average Penny Market there are around 3,500 different products.
The way towards more honest pricing
The scientists from Augsburg hope that this “double price labelling” will change customers’ shopping behaviour. It could also pave the way for more open and honest food pricing.
Ultimately, however, they would prefer for the “environmental costs” to be gradually added to food prices, for example by taxing CO2 emissions produced by agriculture and nitrogen fertilisers.
“If supermarkets adjusted their prices, it would probably lead to a clear shift toward more plant-based and organically produced products whilst also significantly reducing the impact on the environment,” argues the co-author of the study, Amelie Michalke.
These scientists are not alone in pushing for urgent change. Stefan Hipp, organic farmer and director of baby food manufacturer Hipp, stressed that “it is in all of our interests to push for the real prices of food products to be reflected on their price cards”. Currently, society is carrying the cost of the environmental damage.
Thomas Antkowiak, board member of the Misereor relief organisation, also warned that “if we look honestly at the figures, we must admit that we are doing business at the expense of people and of nature.”
Gaugler emphasises that their calculations by no means include all of the hidden costs associated with food production.
For example, the costs caused by the use of antibiotics in animal breeding, which lead to hyper-resistant bacteria, or those caused by the use of pesticides cannot yet be quantified with enough certainty to be included in the current calculations.
“Thus far we have only considered a fragment of the hidden costs, but they alone are enough to prove that prices lie – some more and some less than others”, concluded the scientist.