Blog: Brands hit with "profiteering" slur
Dean Best | 21 January 2008
To hear a retailer complaining bitterly about the prices charged by its suppliers would provoke a wry smile at food manufacturers from Melbourne to Minnesota.
But in France, the situation is somewhat different. French law prevents retailers from negotiating prices with their suppliers. The law also bans below-cost selling in order to protect the country’s smaller food producers and to protect smaller French shops from being under-cut by supermarkets.
However, with rising commodity costs and food inflation focusing the minds of all across the industry, complaints are being heard loud and clear from France’s retail giants – especially supermarket chain Leclerc and its belligerent chairman.
Michel-Edouard Leclerc has accused some of France’s leading brands of “profiteering” from rising commodity costs. Some suppliers, M Leclerc argues, are using rising commodity costs as a ruse to get rich. The likes of Danone, Lactalis and Bel have been on the receiving end of Leclerc’s ire, with the retailer publishing ads in the French press naming those who he believes are hitting consumers in the pocket. And with the French, like the rest of us, growing increasingly concerned about the cost of living, brand-owners could suffer if the “profiteering” tag sticks.
In recent months, the French government has commissioned a study into the laws governing the country’s retail sector. This week, French economist Jacques Attali, who has led the investigation, will publish his findings. Attali has already proposed legalising below-cost selling – a suggestion France’s food producers have roundly rejected. Attali’s final report hits desks on Wednesday, which could prove something of a watershed day in France’s food industry.
Across the Atlantic, it seems Tesco’s entry into the US last autumn has been a similar turning point. Last week, it emerged that Wal-Mart is set to launch a counter-attack to Tesco's Fresh & Easy venture with its own smaller-format stores. American consumers want more convenience and Wal-Mart looks to be planning to tap into that trend. Tesco may have been first to identify a gap in the market but, with signs that US shopping habits are changing, Wal-Mart may not be the UK retailer’s only rival in a market long seen as a graveyard for the Brits.
Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...
Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
- Danone's Q1: four things to learn
- Who will buy Danone's Stonyfield business?
- Interview: Sir Kensington's on sale to Unilever
- Column: Why snacking is the new meal
- Nestle Q1 update: four things to learn
- Tyson shops Sara Lee bakery, Kettle and Van's
- Nestle to cut UK confectionery jobs
- PepsiCo affirms full-year target as Q1 hits mark
- Icelandic to sell Saucy Fish Co. owner Seachill
- Tyson to buy burger-to-entree firm AdvancePierre