Food producers agree to cut prices in France after government pressure

French Finance Minister Bruno Le Maire has said 75 food producers have pledged to reduce prices by July after weeks of government pressure on companies to stabilize food prices.

Le Maire said 75 producers committed to reducing prices at a meeting on Thursday, and will also submit to the ministry a list of products they will exempt on the shelf next week.

“All products whose prices are falling in wholesale markets should fall in July,” Le Maire said in an interview on BFM TV on Friday.

“I’m thinking about pasta – the price of wheat is falling – I’m thinking about oils, I’m thinking about poultry, I’m thinking about grain, I’m thinking about animal feed and many Thinking about the products that will be sent to me next week.

He said the authorities would conduct an inquiry to ensure that the producers kept to their commitments. “Trust is good, verification is even better,” Le Maire said.

French food prices rose 14.1 percent in the year to May, close to the eurozone average, and overtook energy as the region’s biggest driver of inflation, raising alarm among politicians and consumer groups. The prices of some French food items have risen sharply: olive oil prices have risen by a quarter and eggs cost a fifth more.

However, some executives and retailers believe that food producers are taking advantage of the increase in inflation to increase their profit margins by raising prices higher than necessary to cover higher energy and commodity costs.

The European Central Bank discussed this at its meeting in April, noting that although commodity prices were “falling sharply”, the prices paid by consumers for food had “remained very stable”, suggesting that that the expansion of profit margins was preventing inflation from falling”.

Le Maire has threatened to “name and shame” companies that refuse to participate in measures to reduce food prices and to impose a one-time “windfall” tax on producers if prices do not start coming down. Are.

Most economists believe that the rise in food inflation has peaked after falling in the previous two months. In France, it fell by an annual rate of 15.9 percent in March. But there is still uncertainty over how fast the rise in food prices will go away, and the impact of rising costs on consumers has been marked.

According to one retail executive, overall food sales volume in France has dropped by 4 percent this year, meaning that “today, French citizens are eating 3 to 4 percent less than a year ago”—due to the impact being affected disproportionately. Weakest family.

Le Maire has been pressing producers for the past month to resume commercial price negotiations between producers and retailers, but has faced resistance from several large food groups that have agreed to renegotiate annual prices set in March. Do not want to return to the table.

According to Gerardo Martinez Garcia, an economist at French bank BNP Paribas, “lower commodity and energy costs and better supply chains will moderate food inflation” but this will be “only gradually”. He forecast that eurozone food inflation would still be at 8 percent at the end of the year and remain above 4 percent in the first half of next year.

French Finance Minister Bruno Le Maire has said 75 food producers have pledged to reduce prices by July after weeks of government pressure on companies to stabilize food prices.

Le Maire said 75 producers committed to reducing prices at a meeting on Thursday, and will also submit to the ministry a list of products they will exempt on the shelf next week.

“All products whose prices are falling in wholesale markets should fall in July,” Le Maire said in an interview on BFM TV on Friday.

“I’m thinking about pasta – the price of wheat is falling – I’m thinking about oils, I’m thinking about poultry, I’m thinking about grain, I’m thinking about animal feed and many Thinking about the products that will be sent to me next week.

He said the authorities would conduct an inquiry to ensure that the producers kept to their commitments. “Trust is good, verification is even better,” Le Maire said.

French food prices rose 14.1 percent in the year to May, close to the eurozone average, and overtook energy as the region’s biggest driver of inflation, raising alarm among politicians and consumer groups. The prices of some French food items have risen sharply: olive oil prices have risen by a quarter and eggs cost a fifth more.

However, some executives and retailers believe that food producers are taking advantage of the increase in inflation to increase their profit margins by raising prices higher than necessary to cover higher energy and commodity costs.

The European Central Bank discussed this at its meeting in April, noting that although commodity prices were “falling sharply”, the prices paid by consumers for food had “remained very stable”, suggesting that that the expansion of profit margins was preventing inflation from falling”.

Le Maire has threatened to “name and shame” companies that refuse to participate in measures to reduce food prices and to impose a one-time “windfall” tax on producers if prices do not start coming down. Are.

Most economists believe that the rise in food inflation has peaked after falling in the previous two months. In France, it fell by an annual rate of 15.9 percent in March. But there is still uncertainty over how fast the rise in food prices will go away, and the impact of rising costs on consumers has been marked.

According to one retail executive, overall food sales volume in France has dropped by 4 percent this year, meaning that “today, French citizens are eating 3 to 4 percent less than a year ago”—due to the impact being affected disproportionately. Weakest family.

Le Maire has been pressing producers for the past month to resume commercial price negotiations between producers and retailers, but has faced resistance from several large food groups that have agreed to renegotiate annual prices set in March. Do not want to return to the table.

According to Gerardo Martinez Garcia, an economist at French bank BNP Paribas, “lower commodity and energy costs and better supply chains will moderate food inflation” but this will be “only gradually”. He forecast that eurozone food inflation would still be at 8 percent at the end of the year and remain above 4 percent in the first half of next year.