Price watchdog Stefan Meierhans has faced resistance while investigating suspected price gouging by large retailers for organic food. A voluntary limitation proposal was rejected.
The price watchdog’s investigation had already made headlines before Christmas, because the then-apparently planned publication had been prevented: Migros reportedly dismissed accusations of excessive margins.
The price monitor published an interim report on organic product margins on Friday. As many questions remain open, he will continue to follow the subject closely.
>> Read more: Stefan Meierhans: “There are a lot of people in distress, retailers have a responsibility for our society”
Proposed solution rejected
Following his analysis and “despite the lack of cooperation from certain companies”, Stefan Meierhans offered a few brands a voluntary commitment on the margins of organic products.
Given that consumers are ready to pay between 10% and 30% more for an organic product, he suggested to distributors not to inflate their margin if the price increase linked to the organic nature of the product is already greater than 20%. .
Distributors could only grant themselves a higher net margin on an organic product if the additional cost of organic compared to the conventional product is 20% or less. The companies refused to make this commitment, which would have obliged them to reduce their price, points out Mr Price.
Lack of competition, an explanation
The price monitor compared the margins of organic products in Switzerland and the Netherlands. According to him, this comparison indicates that “the uncompetitive environment in Switzerland contributes to organic products being more expensive, because they have to bear a high additional margin”.
Stefan Meierhans wonders whether the Swiss retail trade should be considered to experience a situation of collective market dominance, as is the case in New Zealand. Therefore, the question arises whether a regulation like that of New Zealand is necessary in Switzerland to prevent too high margins, especially in the organic sector.
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