Inflation and Excessive Corporate Profits: The Autorité de la Concurrence’s Crackdown

2023-06-18 09:08:00

Companies that would play with the windfall effect represented by inflation are in the crosshairs of the Autorité de la concurrence. ” We look, and we have the instruments to sanction, even severely “Said Benoît Coeuré, president of the institution, in an interview published in the daily Le Parisien on Saturday, in reference to companies which would take advantage of the continuation of inflation to increase their prices excessively.

« The persistence of inflation is partly due to excessive corporate profits »

« We have a number of very clear clues and even more than clues, facts, which show that the persistence of inflation is partly due to excessive corporate profits “, detailed the former member of the executive board of the European Central Bank (ECB). The current president of the ECB, Christine Lagarde, while the institution announced last Thursday a new increase in its interest rates, pointed to the high profits of companies which increase their profit margins, at the risk of fueling a spiral price increase. Asked regarding the sectors concerned, the manager was content to answer ” that there are sectors that we look at more particularly “, adding that” when we have suspicions of a cartel, we investigate ».

After a record level of 34% in 2021, the margin rate for companies reached 32% last year, close to its pre-Covid level, according to the Banque de France. Certain sectors such as the agri-food industry, energy, transport and certain service sectors are to be watched, she underlined. ” To companies who say to themselves: “as prices are rising everywhere, it will be less visible if we get along, I say to them: be careful, we are vigilant “says Benoît Coeuré, who also highlights the efficiency of the institution on a daily basis: “ Over the past ten years, the state has received an average of 700 million euros per year. Last year, we imposed 468 million euros in fines, including 300 million for EDF. This means that when the taxpayer puts one euro in the Competition Authority, he gets 20 back. It’s a good investment! If we had more resources, we would impose more fines and bring in more money ».

With the DGCCRF, the Ministry of the Economy will sanction manufacturers who do not keep their promises

« We want there to be no exceptional margins that are made in these difficult years for our compatriots “, had been able to say mid-May on TF1 Emmanuel Macron, pleading for” first put pressure on large distribution groups when we realize that they play a little on the margins ».

Bruno Le Maire, Minister of the Economy, then put pressure on the industrialists to return to the negotiating table, which they ended up accepting: “ from July, on a certain number of references and products, prices will drop. And we will check it, and we will sanction those who do not play the game via fraud prevention checks (DGCCRF) he assured in early June.

“Inflation on food products has become structural” (Dominique Schelcher, System U)

(With AFP)