Background 1 commentupdate:Apr 11, 2014

Chicken - victim of price wars

Earlier this week, I did some grocery shopping at a local Jumbo supermarket in my home country of the Netherlands. Usually we go to Albert Heijn, which has been taking the lead in the Netherlands for the past couple of decades. But for just this occasion we quickly went to Jumbo.

Jumbo is growing rapidly and challenging Albert Heijn quite a bit. As a result they are fighting a battle, with both of them claiming they guarantee the lowest prices. I already knew that from Albert Heijn, but also clearly noticed it when I explored the new Jumbo.

It made me think about an article which I read in a daily newspaper last week. That was analysing the battle between these two supermarkets and the way they are promoting lowest priced chicken. Also in relation to the resistance of animal rights organisation "Wakker Dier" (animal awake), who strongly oppose the sale of what they call "Exploding Chicken".

The Dutch association of supermarkets agreed about a year ago that they would only sell slow growing broilers, or "Chicken of tomorrow". But it remains a "which was first, the chicken or the egg" discussion, according to poultry economist Peter van Horne of Wageningen University in the newspaper article. There's simply not enough supply of this kind of chicken. And as a result, supermarkets are not rushing to switch, apart from some kind of a free range alternative that they may offer. They keep promoting the low cost chicken, even selling below cost price. Ridiculous of course. Their profit does not come from selling low cost meat, but from pulling customers to their supermarkets and sell other products to them. Only if they guarantee farmers to buy slow growing broilers, these farmers will invest and make a switch to growing such breeds.

There's only one solution, says Van Horne. No more promoting lowest price meat. And don't allow supermarkets to sell below cost price, like in Belgium. Let them promote teabags at a guaranteed lowest price, rather than products of animal origin. Fully agree with him!

One comment

  • Fabio Nunes


    The same happens in Brazil - whole chicken is usually sold at major grocery store at very cheap price, sometimes below cost, as to attract costumers to the stores and sell them a lot more than just cheap chicken. Chicken is used as a (very efficient) bait.
    I disagree, though, that the government has to intervene to prohibit this kind of practice, or that cheap meat products promotions should be banned. I believe that supermarkets, like any other economical enterprise, must be governed as per the market laws. Selling for below-the-cost price is not a crime anywhere in the world, as such it is not against the law or even against consumers' interest! Therefore I don't reason to ban it!
    The good side of the story is that, by doing so, they are pushing chicken consumption hard and helping the 'exploding chicken' industry, yet at the expense of the 'slow broilers' farmers! This must be a topic for an upcoming story, though!

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