- The French government, led by Bruno Le Maire, is working to ensure that the prices of 5,000 products will not increase and could even decrease. However, this is dependent on negotiations between retailers and manufacturers.
- Despite the government’s efforts to combat inflation, market data shows that food prices have already started to fall, decreasing by 1.5% in August compared to July.
- The current system of annual price negotiations is being called into question. France is one of the few Western countries to organize negotiations between retailers and manufacturers, initially designed to protect industries against price volatility on a weekly or monthly basis.
- A proposed bill aims to further regulate the sector, but there is skepticism about whether more laws are the answer. Some are calling for a more market-oriented approach and more vigilant consumer associations.
- There is a debate about a law that would limit promotions, particularly for hygiene products. Critics argue that this would negatively impact consumer purchasing power, while proponents say it is designed to prevent price manipulation.
FOOD: PRICES OF 5,000 PRODUCTS CAPPED / BFM
- Rodolphe Bonnasse expresses his caution regarding the government’s announcement to freeze or reduce the prices of 5,000 products.
- He points out that hypermarkets typically offer between 30,000 and 50,000 product references, making it difficult to identify and track these specific items.
- The focus should be on ensuring that these products are comparable across different retail chains and that they constitute essential items such as yogurt, pasta, sugar, milk, and flour.
- Government agencies, such as the DGCCRF, already carry out price checks and monitoring in stores to ensure price stability and the accuracy of price information.
- The success of this policy will depend on effective cooperation between manufacturers and retailers to implement and maintain stable prices for these selected products.
Price drops: the admission of failure
Distributors and manufacturers:
- Only 5,000 products have their prices frozen or reduced. This number is quite low considering that there are 30,000 to 50,000 references in a supermarket.
- The lists of impacted products are made by the retailers in agreement with the manufacturers.
Consumers:
- Consumers can access these products on the shelves thanks to labeling. Thanks to this very good readability, supermarkets have seen sales of these products increase.
Risks of this action:
- If supermarkets do not mark their shelves, there is a risk that frozen products will be confused with promotional offers.
- Some retailers do not tolerate this measure taken by the government because they consider themselves to be cheaper than the market.
Some large industrial groups are not playing the game on a France-wide scale and this will impact their sales and positioning. However, they have emblematic and unthronable products.
Distributors do not take the risk of telling the brand that their product will not be distributed in their store because this would have too much impact on the distributor’s turnover. The balance of power can be reversed and this is one of the reasons why some retailers do not integrate this policy of frozen prices.