Auchan expects its net profit to fall by more than 10% this year due to an increase in suppliers' rates.

The admission was made by the chairman of the international retailer and quoted by the French newspaper Les Echoes.

The French subsidiary of the group has seen its profitability decline since 2004 and has made calls for more freedom in negotiating prices with its suppliers.

The comments come as French government economic think tank leader Jacques Attali is suggesting that France lift its 30-year-old retail planning controls and revoke laws banning below-cost selling.

Attali's team is recommending that President Nicolas Sarkozy draw a line under regulations outlawing below-cost selling, introduced in 1997 by Business Minister Yves Galland, which the commission believes would result in a drop of between 2% and 4% in retail prices, while creating up to 1m retail and foodservice jobs.

However, today speaking on behalf of France's 10,000 food manufacturers, the National Food Industries Association (ANIA), today roundly rebutted the findings of Jacques Attali's French national economic think tank.

ANIA president Jean-René Buisson challenged Attali's suggestion that removing retail planning restrictions or legalising below cost selling would kick start the retail economy.