Organic Consumers Association

Supermarket Chains Control Prices for Farmers & Consumers


While it may not come as surprising news to produce growers or shippers three new studies by USDA-ERS show that retail prices for fresh fruits and vegetables are not necessarily linked to the prices those retailers pay suppliers. The studies found no indication of illegal price fixing among supermarket chains but did find that the concentration of buying power in the hands of fewer retailers has given those retailers significant power to set and maintain prices. The degree to which a retailer has pricing
power varies among produce items. Oranges and grapes were two items studied
by ERA in which retailers are shown to have significant pricing power.

The studies also verified some assumptions widely held by suppliers: first that retailers have greater control of the prices they pay for a commodity when that commodity is present in large quantities; and second, that retailers are quicker to raise retail prices when shippers' prices rise and slower to lower them when shippers' prices decline. In summary, the studies say evidence supports the conclusion that retail buyers are often able to exercise oligopoly power in procuring fresh produce, put simply, they can
squeeze producers. The studies are part of a three-year ongoing look at the relationship between producers and retailers in the produce industry.

You can view the complete studies at,, and

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