Sector News

German supermarket pilots price spikes to reflect the “true environmental cost” of food

August 6, 2023
Food & Drink

PENNY, a German-French supermarket chain based in Germany, is conducting a scientific study in collaboration with TH Nuremberg and the University of Greifswald to highlight the “true cost” of foods and foster the discussion about food prices and sustainability. The company is using 2,150 markets as a database for the pilot.

PENNY is selling nine selected products from July 31 to August 5 at their “true costs.” For instance, the cost of organic sausages has risen by 63% from €3.29 (US$3.61) to €5.36 (US$5.88), mozzarella from €0.89 (US$0.98) to €1.55 (US$1.7) and organic fruit yogurt with a 31% jumps to €1.56 (US$1.71).

“We see that many of our customers are suffering from persistently high food prices. Nevertheless, we have to face the uncomfortable message that our food prices, 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,” highlights Stefan Görgens, COO at PENNY.

What is the “true cost?”
Foods’ “true cost” includes the food supply chain’s environmental and social follow-up prices. To calculate it, scientists include the impact of soil, climate, water and health factors on a product’s sales price.

Academics will study the data gathered during the week-long experiment to understand purchasing behavior and knowledge and acceptance of the concept of “True Cost Accounting,” which converts the food’s effects on ecological or social systems into monetary units.

“It’s not about immediately introducing the true cost of all food,” notes Dr. Amelie Michalke, a sustainability scientist at the University of Greifswald. She points to “a lack of comprehensive scientific foundations” and answers to central questions of social justice. With this initiative, she hopes for a “strong impetus” to push the discussion over food prices in a “fairer form.”

Professor Tobias Gaugler from the Technical University of Nuremberg explains the utility of the study: “We receive comprehensive data about the campaign week, but also about comparison weeks and socio-demographic information. We can certainly gain valuable insights into purchasing behavior and acceptance of the topic.”

The action can help design “sensible political measures” that contribute to a “sustainable transformation” of the food sector for consumers and producers.

Addressing a “central challenge”
A central challenge is that everyone must be able to “afford high-quality food.” The campaign can help enlighten consumers about the actual costs of the foods they buy and push them to make more informed choices.

PENNY wants to intensify further efforts for “more sustainable” food that helps bring down the environmental costs.

The company will donate the additional income generated from the true costs to the future farmer under its “Future Builder” project. It was started in October 2021 in conjunction with the Berchtesgadener Land dairy, farmers and customers to contribute to climate protection and preserve family-run farms in the Alpine region.

By Insha Naureen


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