2023-04-19 15:58:23
Romain Rouillard / Photo credits: IDHIR BAHA / HANS LUCAS / HANS LUCAS VIA AFP
Several products sold on supermarket shelves continue to command high prices even as the cost of the raw material needed to produce them is plummeting. A discrepancy which led Bruno Le Maire, Minister of the Economy, to put pressure on the big industrialists.
Food products are undoubtedly the best reflection of the inflationary wave that has been hitting France for more than a year. The latter have seen their prices soar by 14.8% in one year, according to INSEE figures published last month. A figure significantly higher than overall inflation, estimated at 6.3% between February 2022 and February 2023. In question, the large increases demanded by manufacturers from distributors, justified by the surge in production costs and raw materials that have become quite expensive.
Valid argument? Not completely, according to Olivier Dauvers, specialist in mass distribution. On his blog, the journalist has identified several products whose cost of the raw materials necessary for their development struggles to justify the prices displayed on the shelves. Thus, inflation on sunflower oils reached 22% on average in April 2023, compared to last year. A figure that even climbs to 33% for major brands. All while the cost of producing a ton of oil plummeted from 2,366 to 1,088 dollars. A drop of 55% in no way reflected on the consumer’s receipt.
Bruno Le Maire’s ultimatum
Same observation for industrial biscuits, sold 15% more expensive this year while the ton of wheat costs, on average, 40% less expensive. Coffee is also experiencing a similar phenomenon since the cost of production has contracted by 16% while certain major brands have applied an additional cost of up to 29% on certain brands. “Certainly, the link is not always direct or proportional between raw materials and RRP (recommended retail prices) on the shelves. It is even sometimes partial (sugar for syrups which also include fruit or sunflower oil for a multi-variety oil, etc.). Nevertheless: the raw materials give a trend of the direction of the wind: inflation or deflation”, writes Olivier Dauvers on his blog.
According to the specialist, only the “natural and legitimate” desire of distributors to restore their margins can explain such a shift. Enough to push Bruno Le Maire, Minister of the Economy, to bang his fist on the table and urge distributors to sit down at the renegotiation table. While giving them an ultimatum: “I leave them a few weeks to engage in these discussions to pass on the price drops that we see on the wholesale markets. We see it on the big panels of the stock market, I would like that we see it in the Caddie”, he declared on RMC-BFMTV.
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