The Soil Association has slammed Asda for cutting more organic prices. "We are extremely worried about what appears to be an escalating organic price war, currently led by Asda," said Soil Association director Patrick Holden. Asda cut prices by up to 20% and challenged suggestions that the organic bubble had burst after Iceland blamed its organics only policy for a drop in sales (The Grocer, January 27, p14). "Selling organic produce at a fair price will result in people buying more and this will help the market grow," said an Asda spokeswoman. But according to Holden this strategy "will end in tears". "Downward pressure on prices is not in the interest of the retailer, producer or consumer. It will undermine the integrity of organic food." Graham Keating, md of Yeo Valley Organic, said: "We are not in favour of organic foods being undersold as part of a permanent low pricing policy. We believe this will only confuse the marketplace, could inhibit investment and will slow down the long-term growth of a business that is still in its infancy." Despite Holden being against EDLP on organics, he believes promotions like Tesco's Organic Offers' could benefit the industry: "Occasional offers will help introduce the produce to a wider consumer group who will then realise the difference in quality between conventional and organic foods, resulting in consumers being prepared to pay the extra cost." Organic Offers' started this week and will run in all Tesco stores for three weeks. "Everyone knows that organic products cost more, but we want to narrow some of the price differences through promotions to thank customers for supporting the organic cause, and to help customers who want to try organic for the first time," said Tesco director John Gildersleeve. {{NEWS }}

Topics