A new study by the Fédération romande des consommateurs (FRC) has revealed that farmers in Switzerland receive very little profit, if any, from selling their vegetables and other produce. The FRC blamed the high profit margins of Migros and Coop, and other international companies, for the “unfair” returns. Migros and Coop have argued that their prices are fair and competitive.
In the study, the FRC looked at the pricing of seasonal vegetables grown in Switzerland and sold in Migros and Coop. They found that only a fraction of the profit made from food sales actually gets sent to farmers.
In 2021, for example, out of the 1,80-franc cost of a cucumber at Migros, a farmer only received 13 rappen (centimes) profit per unit sold. In 2022, because of the increased cost of fertiliser and energy, farmers only receive 2 rappen's worth of income for every cucumber they sell, compared with the 54 rappen margin given to Migros.
This is backed up by a previous study by the FRC back in June, which found that the larger supermarkets are often selling products at near-double wholesale prices. Meanwhile, if subsidies given by the government are taken away, the FRC found that farmers are actually selling key products like milk at a loss.
Finally, the report said that the higher prices for shoppers can also be explained by Swiss consumers' desire to buy local produce, despite the high cost. However, instead of benefiting from the demand, as "most [farmers] sell 80 to 90 percent of their lettuce, tomatoes and cucumbers to [Coop and Migros]," according to a farmer interviewed by SonntagsBlick, farmers are unable to manipulate the prices in their favour.
"It cannot be that the farmers have all the risk, but earn almost nothing from their products," noted National Councillor Sophie Michaud Gigon. "The losers in today's situation are the farmers and consumers," she said, calling on the government to produce a report into how monopolies in supermarkets adversely affect prices - something that has already been called for by the Economic Commission of the Council of States.
Speaking to SonntagsBlick, a spokesperson for Migros said that "like any other company, we do not disclose margins for individual items," but claimed that they "could not afford excessively high margins given the tough competition in the retail sector." They said that their profit margin on food is only around 2 percent, meaning the 54 rappen profit cited by the study is likely spent by the company on salaries, rent and other running costs.
This was echoed by Coop, which noted in a statement that its cooperative structure limits them to a 1,8 rappen profit for every franc of sales. They concluded that Coop’s suppliers receive a "fair and market-driven price."