German supermarket trials pricing system that reflects environmental damage
Prices in Penny have skyrocketed this week, but not because of inflation. The discount supermarket is selling products for their “real cost” as part of a week-long promotion scheme.
Penny supermarket trials new climate pricing system
Penny, one of Germany’s most popular discount supermarkets, is trialling a policy where certain foods are sold with a price tag which more accurately reflects how their industrial production damages the environment, customers’ and labourers' health.
The marketing scheme will last one week, has been adopted in 2.150 Penny shops across the country and has been applied to only nine products on sale, all of which are own-brand Penny products.
Working with academics from the Nuremberg Institute of Technology and the University of Greifswald, Penny determined the new “true costs” by increasing prices in accordance with how producing the nine foodstuffs damages soil, climate, how much water is required for production and the long-term health consequences of eating the product.
Penny pricing reveals the true cost of animal products
The specific products included in the scheme are Dutch Maasdamer cheese, Mozzarella, yoghurt and wiener sausages, for each of which there is an organic and non-organic version. The ninth product included in the trial is a vegan version of the traditional Schnitzel.
The scheme reveals the difference in “true cost” between organic and non-organic products and the discrepancy between actual pricing and “true cost”. For the week, Penny’s 300g packet of regular Maasdamer has risen in price from 2,49 euros to 4,84 euros and the 200g packet of organic Maasdamer from 2,19 to 3,70 euros.
For the non-organic Maasdamer, the figure was reached by adding 84 cents for emissions, such as methane and CO2, 76 cents for soil damage caused by farming and animal feed production, 63 cents for pesticides that were used and the long-term impact they have on farmers’ health, and 12 cents for water consumption.
When it comes to the Wiener Würstchen the price hike was also stark, with a 400g packet of the Penny sausages rising from 3,19 euros to 6,01 euros and, for 300g of the organic product, from 3,29 to 5,36 euros. In comparison, the vegan Schnitzel, which is sold as part of Penny’s rapidly expanding “Food for Future” vegan, own-brand product line, increased in price by just 5 percent, from 2,68 euros to 2,83.
Part of the team from the University of Greisfswald, industrial engineer and sustainability expert Amelie Michalke said that it was not yet possible to make realistic calculations of “real costs” on a larger group of products. Nonetheless, the researchers hope that the experiment will “give us a strong impulse to discuss and consider prices for groceries in a way that is user-friendly and fair."
German farmers accuse Penny of greenwashing
Speaking to Tagesschau, Penny boss Stefan Görges said that the company hopes the scheme will “create an awareness around the hidden environmental costs of groceries." “We need to put out the uncomfortable message that the prices of our foodstuffs which are accrued along the supply chain in no way reflect the environmental on-costs,” Görges told the programme.
But critics of the supermarket accuse bosses of greenwashing. “The Penny “real cost” promotion is primarily a greenwashing project carried out at the expense of farmers,” General Secretary of the German Farmers’ Association Bernhard Krüsken told Tagesschau. Krüsken added that the discounter “otherwise has little interest in fair pricing”.
Further criticisms have come from Foodwatch, a non-profit organisation which operates in Germany, Austria, France and the Netherlands to reveal information about food produced and eaten in Europe. The organisation is unconvinced by Penny’s promotion, calling the scheme nothing more than a PR gag designed to distract customers while the company lowers prices on other climate-damaging products to a minimum.
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