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July 21, 2022

Food inflation – France’s Senate highlights “questionable practices” at retailers

Last month, one major French retailer called for an official probe into suppliers’ “suspect” price requests.

By Dean Best

French politicians have poured cold water on claims by outspoken retail tycoon Michel-Édouard Leclerc that some suppliers were making “suspect” requests to up prices.

In a report on the recent rise in consumer prices in France, the country’s upper house said “there does not seem to be a generalised phenomenon of unjustified price increases by manufacturers vis-à-vis distributors, with some exceptions”.

Suppliers, the report by France’s Sénat argued, were making requests for hikes that were “largely linked to the spectacular rise in the cost of raw materials”.

By contrast, the authors of the report suggested there have been “questionable practices” carried out among retailers. As an example, the report said some grocers had upped prices on shelves even after refusing price requests from suppliers.

The report was welcomed by ANIA, France’s food manufacturing trade body. In a series of tweets, the association said the research “silences the unfounded accusations of those who accuse companies of being ‘speculators’.”

ANIA said retailers need to “urgently take into account the economic reality of suppliers”.

Last month, Mr. Leclerc, the chairman of the executive committee of major French food retailer E.Leclerc, called on the country’s parliamentarians to open an investigation into “the origins of inflation, on what is happening on the price front, from transport to consumers”.

Speaking to French broadcaster BFMTV, he claimed “half of the increases [in price] requested are not transparent”.

Mr. Leclerc said: “When you see that all the suppliers are coming in with transport bills that have increased by 15, 20, 30% – and in particular container prices which have increased by 30% – and, at the same time, you see that the transport companies are coming out with profits in the billions last year, it is clear it is not the unavailability of containers that has made what is rare expensive.”

A parliamentary investigation “would help us a lot to have this obligation of transparency, including before the public authorities”, he added.

Just Food has contacted E.Leclerc, as well as three other major French retailers – Auchan, Carrefour and Casino – for comment on the Sénat’s report.

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