Fresh fruit and vegetable marketing system in Sri Lanka: Emerging changes and their implications

Abstract

Emergence of supermarkets is a major development in the vegetable and fruit marketing system in Sri Lanka during the last ten years. The change that began in early 1990s with the establishment of a handful of supermarkets in the more affluent areas in Colombo. Since then, the change has created a major difference in the retail marketing of these commodities and within a span of about twelve years it has grown to large network with 91 supermarkets operated by six major companies. The total volume of vegetables handled by six major supermarkets in Colombo is estimated to be about 60,000 kg/day in 2004. Most supermarkets have established close direct links with the producers, bypassing some o f the ‘ middlemen’, enabling the negotiation of prices to mutual advantage. The sale of vegetable and fruits through the system of supermarkets has facilitated the process of value addition through better grading, sorting, processing, improved packaging and transport. The rapid rise in the supermarket s is caused by a number of factors including sharp rises in the urban population, market liberalization, improved income levels, changes in the urban life styles and food consumers and increased information flows. The growth in consumer demand for supermarket style trading service has provided a highly competitive environment for the supermarket operators as well. This competition in turn has led to improved customer service standards, better accountability and more transparent and effective pricing mechanisms within the domestic agricultural marketing system. This study also identifies several areas that the government and other institutions should focus in improving and expanding the service of the supermarket system.