The price of food we buy in stores results from a complex process involving many actors from production to distribution. A lesser-known aspect of this process is the significant gap between retail prices and what farmers actually receive for their products.
France Bleu 05/02/24
In a recent protest at Leclerc in Guéret, Creuse, beekeepers expressed their anger over unfair competition from imported honey. Only 25% of honey jars on the shelves are locally sourced, with the majority coming from Argentina, Bulgaria, Ukraine, Spain, and Vietnam, sold at prices up to four times lower than French honey. This aggressive competition, combined with a lack of transparency on labels, puts French beekeepers in a precarious economic situation.
Descrozaille Law and Its Impact
Europe1 02/02/24
The recent adoption of the Descrozaille law has introduced significant reforms in the French distribution landscape. This law, aimed at regulating promotions on hygiene and beauty products, has sparked debates about its impact on the purchasing power of French consumers.
Now, discounts on these products are limited to 34%, ending more aggressive promotions like “buy one, get one free” or discounts up to 50%. This measure, though intended to structure commercial practices, has raised concerns about its effect on the final cost for consumers.
Promotions have often allowed families to make substantial savings, especially on products whose full prices weigh heavily on their budgets. Consumers, used to choosing their supermarket based on the promotions offered, may see their shopping habits disrupted. The Descrozaille law challenges this dynamic.
The declared objective of the law is to rebalance margins within the distribution chain. However, this reorganization could lead to higher prices for consumers without necessarily benefiting upstream actors like farmers.
France info 01/02/24
The French government has announced measures to strengthen the regulation of commercial relationships between distributors and industrialists in the food sector. These announcements, made by Bruno Le Maire, emphasize a thorough review of existing contracts to ensure compliance with commitments regarding agricultural raw materials, a key component of pricing. The EGalim law regulates these relationships, imposing limits on profit margins, promotions, and requiring transparency on product origins. The new measures include stricter controls, particularly on the French origin of products, with severe penalties for non-compliance. These initiatives, in response to agricultural concerns, aim to ensure better economic balance in the food chain.
France bleu 31/01/24
Supermarket Margins: A More Nuanced Reality
BFMTV 31/01/24
Supermarkets are often accused of taking advantage of rising prices to increase their profit margins. However, a recent INSEE study reveals that supermarket margins are actually quite modest.
The study, examining a sample of food products, analyzes supermarket margins. The results show that the average supermarket margin is 2.2%. This figure varies by product, ranging from 1.5% for fruits and vegetables to 3% for grocery items.
BFMTV 31/01/24
Supermarket margins are lower than one might think for several reasons:
- High costs: Storage, transportation, and marketing represent significant costs for supermarkets.
- Intense competition: The retail sector faces intense competition, forcing supermarkets to maintain low margins to stay competitive.
RTL 31/01/24
The Price Gap Between Producers and Consumers: The Case of Endives
The gap between what farmers receive for their products and what consumers pay in stores is a significant issue in many countries, including France. This gap is particularly stark in the case of endives, a popular vegetable in France. While a bag of endives can cost about 4 euros per kilogram in stores, the producer generally receives only 1.50 to 1.60 euros per kilogram sold. This disparity raises questions about the fair distribution of profits in the food value chain.
This significant price gap has considerable consequences for French endive producers. It poses financial challenges, making it difficult to cover production costs. This situation often forces them to reduce their profit margins, lower their production, or consider leaving agriculture altogether.
To reduce this price gap, farmers should be given a greater negotiating margin with distributors. Another solution would be to promote direct sales of agricultural products to consumers.
Intermediaries: A Weak Link in the Food Chain?
The price of food we buy in stores is the result of a complex process involving many actors from production to distribution. Often overlooked in this process is the significant gap between retail prices and what farmers actually receive for their products.
A large part of the final price can be attributed to the numerous intermediaries involved, from agricultural cooperatives to logistics providers. These intermediaries, necessary for transportation, packaging, and other processes, add their own margins, increasing the final cost for consumers while reducing the share that goes to farmers. Consumers are directly impacted by this final price. However, with the introduction of new regulations like the EGalim law, promotions could become even more limited, affecting consumers’ purchasing power.
Farmers’ Blockades and Their Impact on Major Cities and Supermarkets
Europe1 30/01/24
The Rungis blockade penalizes restaurants:
- Restaurants depend on Rungis for supplies.
- They are forced to alter their menus at the risk of financial losses.
- Restaurateurs are torn between their sympathy for farmers and the survival of their businesses.
- Blockades cause shortages and delays in product deliveries to supermarkets.
Farmers’ Blockades: Towards Empty Shelves in Supermarkets?
BFMTV 28/01/24
Angry farmers block roads, disrupting food deliveries to stores. Supermarkets only stock the amount of food needed for immediate demand. Consequently, delivery delays make them vulnerable to stockouts. These incidents have led to temporary shortages of certain items. It is important to note, however, that these are not generalized shortages, but rather occasional inconveniences due to delays in the supply of certain products.
Farmers’ Protests: Negative Consequences for Supermarkets
Farmers’ protests, ongoing for several weeks, have a negative impact on supermarkets.
“The complex structure of the French agricultural sector hinders efficiency and fair remuneration for farmers”, explains Rodolphe Bonnasse.
The French agricultural sector is currently burdened by an excessive number of intermediaries. This situation has two negative consequences: it contributes to low farmer remuneration and leads to higher costs for consumers.
“Retail prices are high, but the share going to producers is low”, Rodolphe Bonnasse
France should draw inspiration from agricultural models in countries like Spain and Germany, where a more direct and streamlined structure results in better efficiency and fairer remuneration for farmers.