2023-04-22 04:31:00
While inflation continues to rise in the food sector, large retailers denounce certain price increases, according to them, which are unjustified, imposed by manufacturers. The latter refused to reopen the annual negotiations which ended on March 1 with an agreement to raise around 10%. But for the French, it might go up to 25%.
The French are not done with inflation and rising food prices. Because if global inflation seems to be settling, that concerning food products continues its mad race which weighs down the household budget.
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“In March 2023, the consumer price index (CPI) increased by 0.9% over one month, following +1.0% in February. Over one year, consumer prices increased by 5.7% in March 2023, following +6.3% in February. This fall in inflation is due to the slowdown in energy prices (+4.9% following +14.1%)”, explains the National Institute of statistics and economic studies (INSEE) in its latest note on inflation published on 14 April. On the other hand, it notes an “acceleration in food prices over one year.”
+15.9% year on year in March
“Over one year, food prices increased by 15.9% in March 2023, following +14.8% in February. The prices of fresh products accelerated for the third consecutive month (+17.1% following +15 .0% in February and +10.2% in January), in particular those of fresh vegetables (+29.3% following +23.3%) and fresh fruit (+10.1% following +9.8%) Excluding fresh products, food prices also accelerated (+15.7% following +14.8%), in particular those of bread and cereals (+15.4% following +14.4%), meat (+15.5% following +15.4%), cheese and curds (+20.3% following +19.4%)”, adds INSEE.
Suffice to say that the question of purchasing power remains unresolved and the French are wondering if behind these price increases, there might not be windfall effects on the part of agri-food manufacturers, accused of be “crisis profiteers”…
food inflation
For Michel-Edouard Leclerc, boss of the eponymous hypermarkets, there is no doubt. “This subject of purchasing power is the one that crosses all social categories in France. We are currently paying very high prices for food products. Industrialists have hidden a lot behind the war in Ukraine, the scarcity of certain products When we talk regarding coffee and cocoa, it’s not Ukraine”, thundered the media boss, who had already warned of a “red march” of inflation, which the government tried to thwart by launching a “anti-inflation” basket, the effects of which are clearly insufficient.
“The manufacturers are not transparent and therefore there are tensions in the stores”, also assures Michel-Edouard Leclerc, who denounces the sharp price increases demanded by the agro-industrialists. “The law obliges us to pass on these prices, but depending on the degree of aggressiveness of the distributors, it will be translated into selling prices until July”, estimates the company manager, who remains quite pessimistic. “I think inflation will be sustainable, because we will have to finance the new carbon-free economy. We were coming out of ten years of deflation, we are entering ten years of inflation”, he told LSA, however, considering that the inflationary peak in food will be reached “around the month of June”. “The reversal of the markets and the application of the review clauses make it possible to estimate half the inflation in the second half,” he predicts.
Tense annual negotiations
It’s because the annual negotiations between the manufacturers and the supermarkets are over and this traditional showdown between the 1is December and the 1is March has been very intense this year. Alexandre Bompard, the general manager of Carrefour, had denounced the “delusional” demands of the industrialists. The law proposal of the deputy Descrozaille aiming to establish new rules in the event of non-agreement had exacerbated the discussions.
In the end, the manufacturers, defended by the National Association of Food Industries (Ania) and the distributors united in the Federation of Trade and Distribution (FCD) agreed on an increase in the prices paid by supermarkets to their suppliers of around 10% ( once morest 10 to 12% requested by manufacturers). An average increase which does not prejudge higher increases on certain products. “The prognosis is between 23 and 25% on food and drugstores, perfumery and hygiene by the end of June,” said Dominique Schelcher, CEO of System U.
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