Tesco CEO: “Era of cheap food is over”

Tesco CEO: “Era of cheap food is over”

The era of cheap food is over: the rising demand for food will eventually make the prices go up. That is at least the opinion of Philip Clarke, CEO of the British market leader Tesco.

Chinese demand pushes up prices

"Over the long run I think food prices and the proportion of income spent on food may well be going up," Clarke said during an interview with The Observer. "Because of growing demand it is going to change. It is the basic law of supply and demand."

 

With his statements, Clarke seems to have the same idea as the World Food Organisation, which only last month calculated prices of food will go up by almost 50 percent during the next decade. The main reasons for this are the growing global population and the rising demand of food for the new middle class in countries such as China and India.
 

Horsemeat scandal still has its effects

There have also been a number of food scandals that had its effects on prices, including Clarke's own chain Tesco, which was involved in the horsemeat scandal in the spring of this year. Clarke said Tesco will start to get a bigger portion of its products from local farmers, in an attempt to repair consumer trust in the chain.

 

A survey of the Prince’s Countryside Fund shows the British are willing to pay more for their food if they know a large portion of the money will find its way to local farmers, instead of shareholders of the companies. 80% also said they think it is important to buy national products in order to support local farmers.
Tags: