A 17% inflation on food products is unprecedented and is forcing more and more consumers to tighten their belts. However, can this situation be resolved? It’s possible. Bruno Le Maire, Minister of the Economy, and Olivia Grégoire, Minister Delegate in charge of Trade, sent a letter to the retail chains (Leclerc, Auchan, Carrefour, etc.) and to manufacturers to invite them to open new negotiations on the price. The fall in the cost of certain raw materials and the slowdown in the rise in energy prices being the reason.
These “encouraging” indicators would make it possible to review the price of certain food items, each time this is objectively justified. In this letter, the ministers ask distributors to “ensure that the price reductions which may result from this renegotiation are, when the time comes, returned to consumers, in full and without delay”. This decision was welcomed by the signs which complained of the increases requested by the industrialists, judging them unjustified.
This is good news for the consumer, but we must be careful not to get carried away. It is unrealistic to expect a drop in receipts of 20% all of a sudden. For the moment, nothing obliges the manufacturers to renegotiate the tariffs downwards and they are not necessarily ready to do so.
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“We agree to renegotiate, but only if there are drastic drops in certain items, such as energy. It is important to note that we are still experiencing significant stress on packaging, such as cardboard and plastic. Adepale president Jérôme Foucault told Capital: “By the summer, prices will not drop for the consumer. »
Although brands managed to obtain an average price increase of 10% in March 2023 from distributors, they believe that it is not enough and that they are still struggling to get by. François-Xavier Apostolo, general manager of Harris-Briochin (maintenance, cleaning and cosmetics products), says: “Fortunately, we obtained increases, but only 30% of our costs were covered. The SME also claimed to have obtained less than 10% price increase through distribution.
We are willing to renegotiate, but we must not forget that we have to bear a large part of the inflation on our expenditure items. We believe that manufacturers who have obtained increases of 20 to 25% should make additional efforts. So says François-Xavier Apostolo. »
Inflation: prices that border on the unheard of
However, it is important to reflect on the call made by the government. Indeed, some items have exorbitant prices, which leads to lower purchase volumes. Consumers therefore had to make choices and give up certain products deemed too expensive. This is understandable, especially when you see camemberts at 5 euros each, goat cheese around 8 euros or even a liter of sunflower oil at more than 4 euros in some departments. If new negotiations are started and they lead to price reductions, purchases should then start once more mechanically. The ministers specify that the smooth running of this dynamic of renegotiation will be monitored regularly and will be the subject of a report at the end of the first half of the year. It remains to be seen who will agree to participate in the negotiations and whether the brands will play the game.