In my local market in London it is possible to buy three pounds of Bananas for 50p (about 75c). I find it impossible to believe that it is economically viable to grow, harvest, transport, ship, store, wholesale and then retail bananas for 16p a pound.
These are first rate bananas not rejects.
Someone told me the reason they are so cheap is that Colonel Gadhaffy is buying up bananas at above market price as a form of aid, and dumping them in Europe.
Can this possibly be true? Do I owe my cheap bannas to Muammar Gadhaffy?
If so; could he be persuaded to dump beer in Britain?
(you dont want to know what happens if you put “colonel gadhaffy bananas” into google)
A shipment of perfectly good bananas can be rejected at the intended customer due to crushed boxes, or being too ripe for their needs. If it is too ripe, the banana people need to unload them fast before they become overripe, and deal with brokers who buy them at a reduced rate. These brokers can dish off the ripe bananas more quickly than a Sainsburys can, since Sainsburys uses distribution centers and already has a line of bananas in the pipeline, it can take three days to hit the store shelves. If the bananas are already ripe, they may not last three days and still look yellow (sellable). Major retailers often buy bananas green and ripen them themselves, or buy them at a specific level of ripeness and lets them fully ripen naturally as they move to the store shelf. They cannot handle yellow, fully ripe fruit, and the banana people would have to throw them away or donate to food shelters if they did not have the broker outlet. (They do also donate to shelters).
I can tell you as a produce retail market that we buy 40lb boxes of bananas for $11-$12 approx. We put them on the rack at 29¢/lb and use them as a loss leader. We usually make almost nothing on a case (and sometimes lose money). But on many many occasions I have rang up $20 sales, $50 sales, and once or twice 2 shopping cart fulls (I think it broke 100 dollars) and afterwords the person will say “And I only came in for bananas!”
I have had a cheeky look at the bananas. They are Del Monte ones from south america. I asked the traders what they paid for them and they said about half what they’re selling them from.
They are of the opinion that they are being sold below cost price.
Also the price in America is no comparison at all. They have to get over the atlantic in a sod-off great banana boat. That costs.
So is Gadhaffy picking up my banana bill?. I think he might be:
Put “libya bananas” into google and read the bbc report that come up (cant get link thingum to work from this pc).
Just a WAG, but I’d say buying and re-selling bananas as a form of aid doesn’t make sense. Banana plantations are AFAIK mostly owned by large corporations, which Libya probably doesn’t want to support (there are those fair-trade bananas produced by local co-operatives in Third World countries, but those are much more expensive than standard ones). If he wanted to aid banana-producing countries, he’d better do something else I guess.
Thanks for the cheeky look, I work for that company. South America would be Brazil, Colombia, or maybe, but probably not, Ecuador. Could be Central American, out of Costa Rica. But rest assured, we are not selling to Libya. That BBC story is about him buying bananas from the Caribbean, which enjoyed lower tariffs into the EU at that time (Sep 10, 2001) and was prompting a trade war. That has been settled quite a bit with allocations and such. No worries, mate.
It seems to me that bananas are an ideal commodity for stores to use as a loss leader (an item that they sell at below cost to get you in the store). You can only eat so many bananas at a time, and they become ripe on a semi-random schedule. I buy bananas slightly green, and I hate it if they get spots of brown. I can only buy a few below cost bananas and eat them at my prefered ripeness level. If I buy too much I get a bunch that go bad and I have to make banana bread. How many people make banana bread from scratch? Sure, you THINK about making it, but 9 times out of 10 a few black bananas end up in the trash.
So people are likely to buy the cheap bananas, but they won’t get too much, and you can’t “stock up” on them like you can on canned goods or more durable fruit. The grocer gets you in the store, you feel you are getting a great deal, but you can’t bankrupt them by buying too many.
