Disclosing Real Prices of Products: Why Would a Producer Do This?

In recent years we see a growing number of initiatives for assessing and showing the ‘real’ or ‘true’ price of consumer products, in food and in other product categories. Not included in the market prices are the impacts of pollution, like the high costs of the weather extremes that we increasingly are experiencing. Also not included is the gap between the exploitative wages in low-income countries paid to workers and a ‘fair living wage’ that would allow these workers to escape from poverty. And many more negative impacts are not represented in the prices of products. So it is essential to make such analyses. Some do go further. In some cases, supermarkets have started selling products for these higher ‘real’ prices, Supermarket De Aanzet in Amsterdam and Penny in Germany.

Why should a producer or supermarket do this?

What do they do with these extra incomes, generated by letting the consumers pay this extra price?

In the examples given the extra revenues are donated to organizations that implement projects in low-income countries.

Oiconomy Pricing takes another route. The core feature is that producers make this analysis themselves, together with their suppliers. Once hidden costs are found, the value chain partners are expected to discuss ways to improve their performance directly. This may raise the price of the product, but the benefit flows directly to the stakeholders effected by the unsustainable practice (better payments, emissions avoided, corruption prevented etc.).