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There's a Reason Why Supermarkets' 'Value' Ranges Are So Cheap - And It's Got Nothing to Do With Value

07/07/2014 15:37 BST | Updated 05/09/2014 10:59 BST

Recently I was chatting with an independent London baker who had received something of a spreading from an outraged customer. She'd told him £2 was daylight robbery for what was essentially yeast and flour; he had responded with a careful breakdown of the labour involved. "Each loaf takes about four hours to make. How much would you pay yourself per hour?" he questioned. The conversation has stuck with me, and, like blogger Robbie Knox, has shifted my buying habits further toward my local independent shops than before.

Stop to think about it, and the outrage is not his price, but the mere pennies supermarkets charge now for the work that goes into a bloomer and other basics. Supermarkets have branded bread, butter and milk in their 'value' ranges, but in reality they just devalue the product, people and animals involved. The solution, we're told, is to buy close to the source - yet anyone who's ventured into an artisan baker recently may also have reacted with confusion as to the obvious price difference. We want to know what makes the lamb chops in our local butchers a steep £5 better than those in Sainsbury's - so I asked.

Dave Butler of WH Higgins butchers in Chorleywood was happy to answer my questions. So was the dairy farmer Steve Hook, who caused a bow wave when he decided to sell his milk direct to the consumer. They're proud to talk about the hard work, knowledge and care that goes into what they do - it's why they do it - and no doubt their supermarket-supplying peers would like to share in their passion: "No one goes into dairy farming not liking cows," Hook points out. "The problem is, they can't afford let it show."

No more could the aforementioned baker afford to love baking if he were to sell his loaves at the supermarket price of 75p a loaf. "If this was an industrial bakery," he observed tartly, "we'd employ three or four people and it would be automated." Instead, they have over ten people for hand manufacture, and insist on quality ingredients, allowing the bread to rise naturally without adding extra yeast.

The difference is tenfold, though not one you appreciate before tasting it. No one will suffer on account of an automated loaf, however. Where pricing really matters is in the meat, egg and dairy trade where the pitifully low sums paid by big retailers - see the latest milk news - is forcing small family farms out of business. This leaves only the intensive, agribusinesses farms - and if you want to know what that means, ask the hens.

If they could talk, they'd tell you that wet summers send the price of hen food - corn, maize etc - soaring. Supermarkets, wary of scaring customers off in the midst of recession, continue to price their eggs the same. Quickly and surely farmers are forced to quit or change tactics: a free range hen eats over 10% more feed per day than a hen in indoor systems, because she's running around. The result, says the BFREPA, is that the British Free Range hen could become much rarer, and battery eggs, whose reputation for animal cruelty and poor hygiene was the talk of the town just a few years ago, a much more common sight on the shelves.

At this point the cows might chip in. Like the hens, they suffer at the hands of poor weather and for organic, ethical farmers like Steve Hook this is disastrous. The cows are stuck indoors, an extra cost, and their organic commitments rightly forbid them to increase grass growth by adding fertilizers. Despite increases in farm gate milk price the extra income farmers have received has been more than swallowed up by an average increase in costs, according to the Royal Association of British Dairy Farmers. "The money you get from selling to Dairy Crest or whatever will probably cover those cost of feeding cows and operating farm, but it will not leave you any for your own life or for investing in the farm," says Hook. "No wonder the average age of a dairy farmer is 58."

Hook's view is that in the food chain the only person that makes any margin is the last seller. "Only by selling my own milk directly to the consumer have I made the farm viable," he says. His butter and cream and milk are all unpasturised and unhomogenised - and as fresh as you could hope for: on the day it's delivered you'll be drinking something which just 36 hours ago was in a cow. What makes this possible is the fact it's priced fairly and Hook himself - rather than a retailer or a pasteurizing firm - receives the money. The cows are milked twice a day, they feed on wild grass (as opposed to the manufactured 'high spec' feed forced upon their intensively farmed cousins), and spend 45% of their time grazing on the Pevensey levels. "The average age of a cow is six years in conventional herds," Hook tells me with sorrow. "Ours is ten."

Hook's sadness is twofold: that fellow farmers cannot have with their cows the close relationship that he has with his, and that milk has now become so devalued. "Dairy farmers across the country are producing this amazing substance, and it's sold as a cheap commodity" he complains. "Being artisan and niche does mean that, yes, it's at the top end in terms of quality - but the price paid for it is far nearer the real value of the food than that which you'd normally pay."

The grim reality is that our basics are almost always sold below production price because that's the only way supermarkets can keep the average basket price under control. For consumers, the answer really is to buy direct from the producer, or as close as you can. They'll get a fair price; you'll get a better product: for example, at WH Higgins the meat has been hung, trimmed, and butchered properly, and they can get exactly the cut and the portion you're after. They might charge more - and it is mere pennies, usually - but the proof is in the production, as Butler explains.

"When meat is hung, it matures: the muscles relax and contract. It tastes better as a result, but the supermarkets avoid it because it loses weight." Even meat with '21-days-matured' on the label is no different: "meat can't mature in a vacuum pack" he remarks with disdain. Instead of being butchered properly, joints and steaks are invariably bunged into boxes, with all the rubbish that a proper butcher would have cut away hidden at the bottom. The making of sausages and burgers is outsourced. In contrast Butler makes all his own sausages and burgers on site, has trained for years to be a butcher - far more than can be said of those working behind Tesco's meat counter - and as for his meat suppliers (poultry from Norfolk, pork from Scotland, beef from Spitalfields market) "we've had the same, who we know and visit regularly, for years."

Opinions vary as to whether the situation is improving. Butler himself is pessimistic - "we're all trying to save a shilling or two. Look at Primark, still heaving after all that fuss with the child labour" - but there's still some hope supermarkets might get clean. Waitrose in particular is committed to ethical and sustainable practices - and a bill given Royal Assent last April sets out rules by which the top ten grocery retailers must abide in order to treat their suppliers fairly. Among the list of stipulations are: "no retrospective discounts, compensation paid for inaccurate forecasting, and no demanding listing fees."

It's a hope worth holding out for. In the meantime, nothing quite beats a shopping experience like the one I had at Open Air Foods. There, they buy from a range of local artisan cheese makers and UK producers, and are full of tales about them. One is called Wobbly Bottom Farm, and makes goats cheese sourced from goats who all have personal names.

"These types of visits and storytelling we can then transfer to the stall and relay to our customers," they say. "They are not just buying cheese but also the added value of knowing that, right from the very origins, their purchase has had quality, taste and passion as the priority - not supermarket margins." Now that is value.