HL Deb 02 November 1995 vol 566 cc1501-3

3.21 p.m.

Viscount Waverley

My Lords, in asking the Question standing in my name on the Order Paper, I wish to declare that Lady Waverley is the High Commissioner for Belize, a Caribbean banana-producing nation state.

The Question was as follows:

To ask Her Majesty's Government:

Whether the loss-leading banana pricing strategy of United Kingdom supermarket multiples undermines the policy of the Government and the European Union on the banana regime.

Baroness Chalker of Wallasey

My Lords, the retail price of bananas is a commercial matter for the supermarkets themselves. We are watching the situation carefully. We will continue to support the banana regime of Lomé.

Viscount Waverley

My Lords, I thank the Minister for replying to the Question at such short notice. Within the European Union, Her Majesty's Government are stalwart supporters of the Caribbean countries and are to be congratulated on that. Is the Minister aware that the banana market is being manipulated by supermarkets in a cavalier fashion? That is a total disregard for the consequences and undermines the good work of the Government. It is only a matter of time before low prices will be borne by Caribbean farmers, so spreading social and economic disaster for the Caribbean nation states. Does the Minister agree that economic development, through fair trade not aid, is the long-term solution for the promotion of democracy, poverty alleviation and sustained growth?

Baroness Chalker of Wallasey

My Lords, perhaps I may make it quite clear that Her Majesty's Government are committed to the European banana policy because it protects Caribbean banana production. However, it also supports the banana growers' efforts to improve their own efficiency and competitiveness, particularly in the Windward Islands, both bilaterally and through the European Community. We agree that trade is exactly what the islands need. However, until that industry is made more efficient and competitive, we will have to go on supporting it. As regards the activities of the supermarkets, all of which seem to be engaged in that pricing policy, it is a commercial matter. It would not be appropriate for the Government to start to interfere in such commercial matters.

Lord Carter

My Lords, is the Minister aware that the situation involves apparent predatory pricing by powerful supermarkets which have no concern whatever for the effect of their policy on some of the poorest farmers in the world whose only cash crop is bananas? Can the Minister tell the House whether there is any evidence that the dollar banana exporters who are opposed to the European banana regime are playing any part in the matter? Further, if it is shown that predatory pricing or other forms of market manipulation are involved, will the Government consider using their powers under the competition and fair trading legislation to intervene?

Baroness Chalker of Wallasey

My Lords, first, there is no evidence that the dollar producers are involved in the commercial decision by various UK supermarkets to reduce the price of bananas to 19p per pound. It is far too early to say whether the predatory pricing will bring down the overall cost of bananas to supermarkets. However, I should have thought that, with distribution and transport costs so high, they would not be able to continue indefinitely selling at 19p a pound and buying at 30p a pound. Therefore, the retail price reductions are being borne by the supermarkets; they are not affecting the import price at present and therefore there is no immediate effect on the banana growers themselves. However, having been involved with the issue for nearly 10 years, I can assure the noble Lord that I am watching the situation extremely carefully.

Viscount Mountgarret

My Lords, may I ask my noble friend whether the European policy on bananas— which she has assured your Lordships that we support—stipulates any particular size or shape of banana? In other words, do the bananas have to be straight or are they allowed to develop in any shape which nature provides for them?

Baroness Chalker of Wallasey

My Lords, the whole policy allows the natural development of bananas; the thickness of their skins is entirely a matter for the banana grower.

Baroness Oppenheim-Barnes

My Lords, can my noble friend say whether Her Majesty's Government resisted the policy of the European Union which has caused the cost of orange juice to consumers to increase by about 40 per cent. because non-Community oranges were banned?

Baroness Chalker of Wallasey

My Lords, I am all for increasing the intake of vitamin C, but frankly bananas and orange juice are two different commodities.

Viscount Montgomery of Alamein

My Lords, returning to bananas, is my noble friend aware that severe restrictions still exist on the importation of Latin American bananas? Does she agree that the consumer interest for Britain would be vastly increased if the restrictions were relieved and importation was on a free and fair basis?

Baroness Chalker of Wallasey

My Lords, my noble friend knows well that we have helped the Caribbean banana producers because they have no alternative crop possibilities. That is why we have been involved in helping them to modernise their industry, to get better and more efficient production and, where the land will permit, to diversify. I do not believe the assistance that has been given to the Caribbean banana producers is something that we should stop. I agree that we should have the choice which we already have, as my noble friend will find if he does the shopping on a Saturday morning.