The profit margins for retailers selling apples and potatoes can reach up to 100%. This is due to the low prices paid to farmers and the high prices charged to consumers.
Experts have attributed this phenomenon to various factors, including the high degree of concentration in the retail sector, retailers’ power over suppliers, and the lack of transparency in the supply chain.
“The problem is not in the production but the subsequent food processing. Retailers have an extraordinary power over suppliers and farmers, which they use to their advantage,” said Petr Očko, the Czech Agricultural and Food Chamber chairman.
Miroslav Koberna, a professor of agricultural economics at the Czech University of Life Sciences in Prague, added, “The profit margins on fruits and vegetables are indeed high, but this is not unique to the Czech Republic. The situation is similar in other EU countries. The problem is not just the prices paid to farmers, but also the lack of transparency in the supply chain.”
Koberna suggested that promoting direct sales between farmers and consumers could solve the problem, eliminating intermediaries and reducing retailers’ power over suppliers.
On average, farmers in the Czech Republic are paid CZK 3 per kilogram of apples and CZK 2 per kilogram of potatoes. In contrast, consumers pay up to CZK 30 and CZK 25 per kilogram, respectively.