Organic produce in Switzerland costs double than neighbouring countries

Aided by the pandemic, the demand for organic food products has literally exploded since last year. With the initiative of June 13 on pesticides and drinking water, the retail trade could see a further acceleration in this sense. In the meanwhile, buying food with the green label remains a fairly expensive affair. This is shown by a study by K-Tipp, the leading Swiss consumer magazine, which carried out an analysis of the largest supermarket chains operating in Switzerland.

K-Tipp compared a basket of 40 products, ranging from fruit and vegetables to cheese, including peeled tomatoes, jam, honey, juices, eggs, all bought on the same day and in the same place (last May 4 in Osternumundigen, BE).

Aldi and Lidl turned out to be the cheapest, with the purchases costing 138 and 141 francs respectively. Migros (CHF 174) and Coop (CHF 189) were the most expensive. The experts chose the least expensive product without paying attention to origin and quality, because, according to various tests carried out, it is often found that the most expensive product is not necessarily the best one. Denner, on the other hand, was not considered because it offers a very limited organic assortment by comparison.

A question of definitions?

According to the study, part of the price disparity stems from the definition of organic: «For all own-brand organic products,« says Coop, «we rely on the Bio Suisse bud and not on the EU minimum organic standards. The bud standards are among the strictest in the world in the organic sector». On the other hand, K-Tipp points out, Aldi and Lidl are partly supplied by the same organic farmers as their competitors, yet Bio Suisse has not yet allowed them to use the same symbol on the label. While according to Migros the price disparity can also be explained by the different percentage of ingredients in the recipes.

The market is very interesting because it is growing fast. According to data from Bio Suisse in 2020 among closures of restaurants, canteens and borders, the retail trade has recorded record figures. Organic food sales have also seen a surge, with purchases by the Swiss amounting to 3.8 billion francs, a jump of almost 20% compared to 2019. As a result the organic market share reached 10.8%. The preferred products are still eggs (market share: 28.9%), bread (26.2%) and vegetables (23.9%). The sharp growth of organic also explains why, while the overall number of agricultural companies has been declining for years (between 1996 and 2019 in Switzerland it fell from almost 80,000 companies to 50,038), organic companies have doubled in the same period. Today there are nearly 7,300, or one in every seven.

Comparison with the border

While the referendum campaign is intensifying in Switzerland, with opponents of the June 13 referendum warning of the risk of substantial price increases for organic products, competition at the border is pressing. According to an investigation by the «NZZ», Swiss organic production is in fact obtained at a high price: practically double the price paid in Germany or Austria. In Switzerland, a basket of 19 goods costs 88% more than in Germany and 91% more than in Austria. As analysts point out, the difference in quality often has little to do with the fact that the environmental and animal protection criteria of German and Austrian organic producers are in many cases stricter than those of the EU. The price differences between Switzerland and its two neighbouring countries are due to four main factors. Firstly, there is the well-known issue of much higher wages in Switzerland (which explains both the higher production costs and the higher spending power of consumers). Store rents are also higher. Also, despite the fact that the number of manufacturers is growing, competition is still limited. Above all, the Swiss market enjoys strong customs protection, which means that food imports are only allowed when domestic production is not sufficient to meet demand. So instead of rising, food prices could fall with more competition and fewer duties. These are two thorny issues that would require a strong structural change in the Swiss primary sector.