- Granada La Palma
- Unica Group
When the Covid crisis broke out and Europe had no masks, we wondered what we had done wrong. From the maximising-profit perspective, there was nothing to object to. The precepts taught in business schools were followed: being efficient and reducing costs to earn more. The competition pushed us to squeeze local suppliers until they couldn’t be squeezed anymore and then we went to China to buy masks, and when we really needed them, we didn’t have them. This model of the sacrosanct value chain is applied to other sectors including the agri-food sector. Unlike with masks during the Covid crisis, there was no shortage of food in Spain. We were the country that best managed this situation and, what’s more, we continued to export food to the rest of the world without slowing down or asking for compensation.
The value chain is just a map, not the territory. The territory is much more complex and sensitive. With the value chain scheme in mind, we push suppliers relentlessly; we are subservient to whoever buys from us to the point that we have lost the ability to dialogue. We only know how to talk about prices, and we compete like wolves with other companies in the same link of the chain. We are all very efficient, but as a group, as a value chain, we sometimes destroy the value we claim to create and maintain and no one seems to accept responsibility.
The case of the Spanish tomato is a clear example. Production has been drastically shrinking in Spain. It happened first in the Canary Islands, then in Murcia, and now the same fate is at the doorstep of Almería, the last great stronghold. There may be several reasons for each type of tomato, such as labour, Holland, taste. But the ultimate reason is our vision of the value chain – the “price, price, price pressure”. What is killing the tomato is the constant lowering of purchase prices, while demanding higher quality and better services from suppliers. Thus we have entered a spiral that is harming producers, who fear losing commercial programmes with customers, as well as distributors, who have begun to find no Spanish suppliers willing to accept their prices.
Distributors can squeeze atomised producers who compete with each other relentlessly. The producer accepts the terms because there is always someone willing to sell at a given price. He accepts the terms until he can’t take it anymore and then he stops producing tomatoes. The next link replies: “It doesn’t matter. We’re going to Morocco or Portugal or wherever.” At this point, as happened with masks, when supplies are missing, when quality is not the same, when safety is not the same, when services are not the same, when prices are not the same, what will they do? Supermarkets? What will they tell their customers? How many purchasing managers are they going to fire until they see where the problem is?
We demonstrate on the streets of our towns when prices are bad and we stay home when they are good. We go to local politicians looking for solutions or we ask for laws such as the Chain Law to try to solve the problem. But if they don’t buy from us and buy from another source, what is a Chain Law worth? Demonstrating, legislating, and waiting for politicians to act will not solve the problem, as the value chain chains us to a model that, in the case of the Spanish tomato, is killing it.
We have to do something different and now if we want to continue to have a strong and sovereign Spanish agri-food industry which provides us with wealth and autonomy. This can only be achieved at a joint value table and not in a “supplier squeeze” value chain.
The numbers are clear. The farmer needs an income to cover his costs plus a little more to be able to produce tomatoes and live. The supermarkets, the same. Let’s sit down and talk about how to maintain the enormous wealth of being in a country like Spain, which can be self-sufficient and in surplus with excellent quality food products, and establish once and for all a sensible environment for all. We are not talking about breaking competition laws – just common sense. In this environment, the consumer doesn’t care whether they pay €1.69 or €1.79 for a kilo of tomatoes, but that subtle difference will make a big change if it reaches the farmer. We will have Spanish tomatoes from committed farmers who will later be loyal customers of the supermarkets. The same happens with milk, meat, fruits and the rest of the vegetables; we can’t keep playing with the things we eat. Ultra-processed products are sold by units at prices that rarely go below €15/kilo. They are big brands and big companies with big lobbying and marketing budgets and they know how to act.
What is the point of the United Nations SDGs, the European Green Deal and the Farm to Fork if we have a value crusher that crushes common value? What is the use of being super sustainable here if we are going to compete on prices with products from elsewhere that are not sustainable but cheaper? If we are only focused on prices, there is no future for anyone, neither for the consumer nor for supermarkets.
Keeping the Spanish tomato is fair, necessary and sensible. Tomatoes make up the lion’s share of vegetable purchases. If we do not take care of the tomato today, we will lose other products later and Spain and Europe will gradually become agri-food dependent and be at the mercy of countries such as China, Morocco, Turkey, South Africa or others that will set prices and supply rhythms for us.
We all need each other and the solutions must come from teamwork, but especially from supermarkets and leading producers that define a sensible scenario, or we will all end up in the queue for the food bank.