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UK SUPERMARKET CHAIN
TAKES ORGANIC LEAD

One of the largest British supermarket chains has announced plans to switch to organic food at no extra cost to consumers.

Supermarket chain Iceland has bought up nearly 40% of the world's organic vegetable crop to meet growing demand from customers.

From October, all frozen vegetables bought at its stores will be completely organic. They will be sold at the same price as average supermarket own-label products.

Iceland is also ploughing 1m (US$1.5 million) into the National Trust, the UK's biggest landowner, for a project to develop more organic land.

The company's investment plans mean profit margins may initially be dented by several million pounds.

Iceland's managing director, Russell Ford, said it was a long-term investment prompted by a survey suggesting that three out of four customers would prefer to buy organic goods if they were cheaper than current prices.

At present, only 3% of UK agricultural land is organic and all the supermarkets are forced to rely heavily on imports to meet demand. "Britain has minimal organic production do to lack of government investment" said Malcolm Walker Iceland chairman

Iceland secured its organic range from Central and North America and Europe. Sainsbury's is believed to have bought up sites on Caribbean islands to guarantee its supplies.

"Britain has minimal organic production due to lack of government investment in the organic industry in its formative years," said Malcolm Walker, chairman of Iceland. "We hope that our investment will help change this."

Iceland's 1m (US$1.5 million) investment will support the National Trust's "'whole farming planning" programme, which works with the charity's tenant farmers to develop environmentally responsible farming practices.

For every pound donated to the National Trust's programme, a further 5 to 7 could be leveraged from European, government or Lottery grants.

Healthy competition

With 40% of the organic crop sown up, Iceland's investment could act as a spur to the rest of the food industry, increase competition and cut prices even further.

The chain, which has 760 stores in the UK, has led the way in several consumer initiatives.

It was the first to ban genetically modified ingredients from its own brands - a move widely welcomed by environmental campaigners like Friends of the Earth.

Patrick Holden, director of the Soil Association, said Iceland's latest initiative was a bold move.

"It will make organic produce much more available to thousands of consumers who haven't had it before," he said.

"For the last 10 years have been advising successive governments that consumer demand for organic products was certain to grow.

"But now we have the sad situation where Iceland have been forced to source organic products in other countries when there are thousands of British farmers literally facing bankruptcy.

"If we had done more to provide them with genuine incentives to convert, we could be supplying our home market from our home production base."

He said the Soil Association would be pressing the government to do more to help farmers convert.

"As we speak, if a British farmer wants to convert there is no aid available from the government because last year's aid package has run out," he added.

The Iceland web site says it all: "Iceland has embarked on an exciting venture which will make organic food a part of everyday eating for all.

Our customers have told us they want more natural food and we have accepted the challenge. We were the first food retailer to remove genetically modified ingredients from our own label range back in May 1998 and we were also the first to remove artificial colours and flavours.

We're committed to giving our customers food they can trust, so now we have turned our attention to organic. Starting with our own label frozen vegetables, this year we will become the first food retailer in this country to switch whole ranges of conventional food to organic with an investment of 8 million. In addition to this we have also pledged a further 1 million to create a unique partnership with the National Trust.

This will help British farmers consider converting to organic in a bid to increase organic acreage in this country.

To ensure customers and farmers get the best deal, instead of hiking up prices to secure large profits like some food retailers, we will be reducing our profit margins. This means we will be able to work alongside farmers and sell organics at the same price as ordinary supermarket own label food."


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