Iceland takes organic lead

Iceland's investment will support 'responsible' farming

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.

Britain has minimal organic production due to lack of government investment

Malcolm Walker, Iceland chairman

Iceland is also ploughing £1m 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.

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.

Iceland has given itself a strong footing in the growing organic market

"We hope that our investment will help change this."

Iceland's £1m 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.

Iceland have been forced to source organic products in other countries when there are thousands of British farmers literally facing bankruptcy

Soil Association

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.