the rise in food prices slows down, manufacturers and distributors summoned to Bercy

2023-08-28 13:05:00

Are manufacturers and distributors going to be slapped on the knuckles? A few months following the government’s promise of a ” noticeable drop in prices » food at the start of the school year, the bill remains painful for consumers. Result, the actors of the sector are, once more, summoned to Bercy this week.

Inflation: it’s confirmed, it slowed to 4.3% in July over one year

« I will bring manufacturers and distributors together with Olivia Grégoire this week to ask them to extend their operations, which have worked “, confirmed Bruno Le Maire, Minister of the Economy, this Monday, August 28, at the microphone of France Inter.

Food prices still high

His cabinet specified that the distributors have an appointment Wednesday morning at the Ministry of the Economy, the industrialists Thursday. The government plans to request expand to more products » promotional operations. The executive hopes above all to convince more industrialists to commit to a ” price drop “. Otherwise, ” we are entering the budget period “, expected at the end of September, “ we have instruments at our disposal for everyone to play the game “warned the Minister of the Economy.

ECB: “No one can say where inflation will be in three months” (Christopher Dembik, Saxo Bank)

In April, the Minister Delegate for Trade, Olivia Grégoire, assured that ” at the start of the school year we will have a visible drop in prices on the shelves » food. The observation drawn up by the Minister of the Economy, Bruno Le Maire, is more nuanced. ” I had indicated that inflation would start to slow in the summer of 2023. Here we are “, he assured at the end of last week.

According to INSEE, food prices were 12.7% higher in July than a year earlier, a slight slowdown compared to June (+13.7%). A reduction in the level of inflation does not, however, correspond to a price drop on the shelves, but to a slower increase. Moreover, prices had already started to climb a year ago, in the wake of the Russian invasion of Ukraine. In total over two years, inflation in supermarkets is greater than 21%, recently recalled the specialized media LSA associated with panelist Circana.

“Prices will not return to pre-crisis levels”

« Inflation will be lasting, and this is a new parameter that will have to be taken into account “, Observed Dominique Schelcher, CEO of the 4th player in French distribution, System U, in a column published Monday on LinkedIn. ” Yes the peak of inflation is behind us, but (…) prices will not return to pre-crisis levels ».

Playing on inflation would be suicidal » or « completely stupid from the food industry, said their representative Jean-Philippe André, president of Ania, on Saturday. ” Inflation is a slow poison for the purchasing power of households, but it is also a poison for the purchasing power of companies “, he underlined at the microphone of France Inter.

« You would have to be suicidal or completely stupid to play on inflation to manage companies in the agri-food sector. That’s absolutely not it is happening, he claimed.

Although he acknowledges that the drop in volumes ” does not help at all Industrialists, the boss of the main organization representing food processing companies (excluding cooperatives) refutes any compensation by unjustified price increases to maintain or increase their profitability. The costs ” are aligned with world commodity prices, some of which are falling but others continue to rise “, he underlined citing the example of sugar, coffee or pork.

Modest efforts

At the end of April, Olivia Grégoire hoped that prices might drop following renegotiations between distributors and agri-food manufacturers. Each year, supermarkets and their agro-industrial suppliers negotiate from December until March 1 the conditions of sale for a large part of the products sold throughout the rest of the year in supermarkets.

During the last episode concluded last March, the average price paid by supermarkets to manufacturers rose by 9%. But the price of a number of raw materials has since fallen. The government has therefore called on the various parties to get back around the negotiating table.

« Very few manufacturers played the game, almost none wanted to renegotiate and 15 to 20 of them agreed to temporary price reductions on a limited number of products, which is very clearly insufficient. “, estimated Monday with AFP Jacques Creyssel, general delegate of the employers’ organization representing the sector, the FCD.

However, the manufacturers explained before the summer that they had committed to a ” effort “, generally in the form of temporary promotions, on the price of ” regarding 1,000 products » big brands, like Coca-Cola for example. In the case of the famous soda, 10% discounts have been granted since August 1 and for three months, but only on certain references, without sugar and in large bottles.

The number of products concerned is also to be compared with the number of references in stores: 3,000 to 5,000 in a supermarket, and between 20,000 and 35,000 in hypermarkets. Before the industrialists, the supermarkets had committed themselves in mid-March, within the framework of a commercial operation that was not very restrictive called ” trimestre anti-inflation “- since extended -, to sell a selection of products left to their discretion, at the ” lowest possible price ».

(With AFP)