“Year-round Negotiations Between Manufacturers and Distributors: A Solution to Falling Food Prices”

2023-04-18 20:26:48

Dominique Schelcher called for negotiations between manufacturers and distributors to be open “all year round” so that product prices fall more quickly when the prices of raw materials also fall.

Guest of BFMTV this Tuesday evening, the president and CEO of system U once once more expressed his concern regarding the increase in the price of food products in the coming weeks.

“The prognosis is between 23 and 25% on food and drugstores, perfumery and hygiene by the end of June,” said Dominique Schelcher on our antenna.

Year-round negotiations

The president of this large distribution group then called into question a “French exception”: the period of commercial negotiations between manufacturers and distributors.

“The prices we currently apply are the result of commercial negotiations for three months between December 1 and February 28, and are not made all year round,” he explained.

However, for some time now, energy and most raw materials have returned to their pre-war levels in Ukraine. Manufacturers negotiated tariff increases this winter which appear to be out of step with the evolution of their production costs.

It is this discrepancy that Dominique Schelcher deplored, who asked on our antenna for the “reopening of negotiations”. This Tuesday morning, the Minister of the Economy Bruno Le Maire gave the same speech on BFMTV. He said that if these negotiations have not resumed by the end of May, he will summon everyone to Bercy.

Sunflower, wheat and coffee on the decline?

These new negotiations should therefore lower the price of certain products. For example, Fruit d’Or sunflower oil was up 33% year-on-year in March, while the price of sunflower was down 55% over the same period.

As for the biscuit department, prices have increased over one year by an average of 15%, while the price of wheat has fallen by 40%. Same for coffee. According to data from FC Markets, cited by specialist Oliviers Dauvers, the price of arabica has fallen by 16% over one year while packets have increased between 25 and 29%.

However, the price of certain products will continue to rise in the coming weeks even if trade negotiations resume because they are suffering from a rise in prices, such as sugar.

Theo Putavy and Pierre Kupferman

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