Opinion - "Isn't it amazing that supermarkets can achieve such low prices when material costs are rising and crops have been laid low by floods?"

Last week it was the £2 chicken from Asda. This week it was the price of cauliflowers (and fruit and veg generally) which the ONS linked directly to the fall in inflation, to just 1.9%. Memo from Prime Minister Gordon Brown to Peter Freeman, Competition Commission, Holborn: 'Don't be too hard on those supermarkets. They're good for the country, you know.' Isn't it amazing that supermarkets are able to achieve these prices when raw material costs are rising and crops, yields and even distribution have been laid low by floods and pestilential rain? It's a tribute to efficiency, scale, buying power and backing hunches/sophisticated economic modelling at the highest level, as Asda's latest quarterly results - in the worst summer everyone can remember - attest. CEO Andy Bond gambled on higher sales to more than offset lower prices. His mid-single-digit sales growth proved him right (see p6). But is the falling cost of produce also a 'tribute' to exploitation? In addition to the case of the 40 Bulgarian courgette pickers who went unpaid for 35 days (see p60), the Gangmasters Licensing Authority said it had a number of cases coming up involving indigenous labour. And workers at a meat farm won the right to oppose shift patterns that would have seen them work three 13-hour shifts in a row (see p58). Clearly these are some of the more extreme examples of exploitation. But a report from Grant Thornton out this week showed 83% of UK food suppliers expect to see more companies within their sector become insolvent during 2007, with more than 50% blaming supermarkets following their refusal to renegotiate prices in light of higher costs. Memo from PM Gordon Brown to Peter Freeman: 'Give 'em hell'.