THE CONSUMERS and Quality of Life Union held a protest outside the Ministry of Commerce on Thursday to complain against the high prices we pay for fruit and vegetables in Cyprus. The Union carried out a little research and found that prices charged for seasonal produce such as apricots and cherries in Paris were one third those being charged in Cyprus.
Cherries were selling in Paris for between two and three euro, while in Cyprus between eight and nine. The price difference was slightly smaller in the case of apricots (€2.50 in Paris and €6 in Cyprus) but still big enough to beg the question: ‘why is fruit so expensive in Cyprus?’ The Union is convinced that the extortionate prices are the result of profiteering, especially by middlemen who pay very low prices to producers and then impose a big mark-up on the wholesale price for grocers and supermarkets, which in their turn add another big mark-up.
There is little doubt that in Cyprus middlemen and supermarkets are accustomed to working with big profit margins, because turnovers are relatively small and competition among them is limited. Perhaps there are too few middlemen, who thus have the power to set high prices. Then again, they perform a role because there are thousands of producers who need to get their produce to the shops and cannot do it themselves.
Perhaps the producers are also charging relatively high prices for their fruit because most farms are small holdings which do not enjoy economies of scale. For instance cherries are picked by hand which means there are labour costs – not low – incorporated into the price. Some farmers might not even consider it worthwhile having all their cherries picked because a smaller supply would fetch a higher price.
What campaigners should not forget is that, ultimately, demand and supply set the price. If there were no demand for cherries at €9 per kilo, the price would come down, but there is adequate demand for the small quantities supplied.
Things are never quite as simple and straightforward as campaigners make out. The Consumers Union called on the commerce minister to take action, but it did not specify what action could be taken. Should a plafond be imposed on fruit prices? Perhaps the producers should set up their own distribution network in order to cut out the greedy middlemen, but would prices come down as a result? Perhaps marginally, but we would still be paying higher prices for cherries and apricots than Parisians.
The only way the high prices of some types of fruit would come down is if the consumers refused to buy them. If consumers behaved more rationally and refused to pay the extortionate price of €9 for a kilo of fruit, the price would fall, though still not to Paris levels.
