More expensive fruits and vegetables to produce, but prices do not rise (cross-border guide)

Context

In a nutshell

• Swiss horticulturists face extra costs of 25% due to the drought, which has been hitting the country for several months. • Prices do not increase despite rising costs, which is surprising considering that horticulturists face a 25% increase in production costs. • Migros, one of the leading food distributors in Switzerland, applies a 3% discount to fruit and vegetable suppliers.

Key facts

• Production costs increased by 25% • Reduction in the supply of fruit and vegetables • 3% discount for Migros • Prices do not increase despite rising costs

The current situation

The drought is severely affecting Swiss horticulture, with horticulturists facing extra costs of 25%. This increase in costs is due to the reduction in the supply of fruits and vegetables, which has been affected by the drought. Horticulturists therefore have to increase prices to cover the additional costs, but prices do not increase despite the increase in costs.

Concrete examples

For example, a Zurich horticulturalist who produces tomatoes faces a 25% increase in production costs due to drought. This means that the selling price of tomatoes will increase by 25 cents each. However, tomato prices do not rise despite rising costs, which is surprising considering that horticulturists face a

Operational details

Drought and record heat are putting a strain on Swiss horticulturists, who face extra costs of 25%. According to the organization Faire Märkte Schweiz (FMS), the increase in production costs and the reduction in the supply of fruits and vegetables are not translating into a fair increase in prices. Migros applies a 3% discount to fruit and vegetable suppliers, but prices do not increase despite the increase in costs.

According to data from the FMS organization, the cost of producing one kilo of tomatoes increased by more than 15 Swiss francs (CHF) due to drought and record heat. This means that horticulturists have to pay at least CHF 25.50 to produce a kilo of tomatoes, whereas before they paid CHF 10.50. However, retail prices did not increase as a result.

“Prices don't go up because buyers aren't willing to pay more for fruits and vegetables,” says Ursula Hunkeler, president of the FMS organization. “Swiss buyers are used to paying low prices for fruit and vegetables, and they are not willing to pay more even if production costs have increased.”

The situation is particularly difficult for the horticulturalists of the Canton of Ticino, who have been affected by drought more than other cantons. According to data from the FMS organization, 70% of horticulturists in the Canton of Ticino suffered losses due to drought and record heat.

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Key points

Faire Märkte Schweiz (FMS) is calling on policy and authorities to take structural action to resolve the issue. You need to adjust prices, eliminate unilateral penalties, and empower buyers. The Competition Commission (Comco) must increase control measures and apply effective rules against unfair commercial practices.

In Switzerland, the agricultural sector is particularly exposed to market challenges. According to a report by the Swiss Confederation, in 2022 70% of fruit and vegetable crops were produced on small farms with fewer than 10 employees. However, the crisis in the sector is evident: in 2022, the price of fruits and vegetables increased by 15% compared to the previous year, while farmers' income decreased by 10%.

The situation is particularly critical in some cantons. For example, in Ticino, the price of fruit and vegetables increased by 20% in 2022, while in Valais it increased by 25%. In these regions, fruit and vegetable production is particularly important for the local economy. However, the lack of price adjustment and the presence of unilateral penalties are endangering the survival of farms.

The Competition Commission (Comco) must increase control measures and apply effective rules against unfair commercial practices. According to FMS, Comco

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Source: swissinfo.ch