The French Government has taken a tough line on food price inflation, demanding that the major food companies in the country reduce prices of key food products as of the beginning of next month. It’s the most radical move by any government so far…
French Finance Minister Bruno Le Maire says he’s secured a pledge from (i.e.- strongarmed) some 75 major food producing companies to reduce the price of hundreds of food products starting next month. The companies, which together produce 80 percent of what French folks eat, could face financial sanctions if they don’t follow through. Le Maire also says he may ‘name and shame’ companies that renege on the deal.
According to a recent Reuters report, “The [French] government is furious that supermarket prices have hit record levels in recent months even though the costs of many raw materials used by food producers have been declining.”
Prices for products such as pasta, poultry and vegetable oil should decline under the deal. Beef, pork and milk prices will not be affected.
“On a certain number of products where wholesale prices have fallen, then the (retail) prices will have to fall too, by 2, 3, 5, maybe even 10 percent,” Le Maire said. A full list of products affected by reductions will be released later this week.
In March, French shoppers saw a record spike of almost 16 percent in retail food prices. At the same time, spending on food at the grocery store has fallen to its lowest level since March 2009, according to data from the INSEE statistics agency.
At the same time, the food industry has seen profits soar, making up in large part for losses during the pandemic, Le Maire said. The overall, the food industry’s operating profits were up 15 percent in the first quarter of 2023 from the previous quarter, INSEE data shows.
Clearly, something has not been working right. Or, at last, not working fairly for consumers.
Supermarket chains across Europe say shoppers are switching to cheaper private label alternatives to branded food products. According to a survey by Euromonitor, 22 percent of Europeans said they plan to by more private label products in 2023, up 5 percentage points from last year.
Elsewhere in Europe, governments have expressed universal concern over food price inflation. But none – except Hungary, and now France, – have taken affirmative action to control or reduce retail food prices.
And you thought we had it tough here at home…
~ Maggie J.