France has reached a deal on food prices – but the country’s finance minister named major suppliers he says could “do much more”.
The deal will see prices frozen or cut on 5,000 products, including many food items.
However, Finance Minister Le Maire said some manufacturers are not doing enough to help the fight against inflation, pointing to Nestlé, PepsiCo and Unilever as being among companies he says are not toeing the line.
Food prices remains a major political issue in France and, after two days of talks with executives and representatives from 75 big retailers and producers, Le Maire told broadcaster France2 today (31 August) he had received pledges on thousands of everyday products.
“They have made a first commitment: prices will not increase or will fall for 5,000 references,” he said.
“Price reductions must be 5%, 10 %or 15% depending on the groups concerned.”
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Le Maire added: “It was necessary to conclude a global agreement between manufacturers and distributors to break this spiral of food inflation which penalises all our compatriots.”
He also said manufacturers had agreed to bring forward annual price negotiations – initially planned for next year – to September. The talks will last until mid-October with a view to having price cuts from January.
Le Maire said some food categories, including oil, pasta and poultry, have already experienced falling prices.
He praised Italian pasta company Barilla for agreeing to price cuts but claimed others were unwilling to do as much.
“There are other industrial groups, which I would like to mention, that don’t play ball and could do more,” Le Maire told France2.
“I’m thinking about Unilever, Nestlé, PepsiCo, which are very large multinationals that did a little bit but not much. I think they could do much more.”
Just Food asked Unilever, Nestlé and PepsiCo for their response to Le Maire’s comments. Unilever and Nestlé declined to comment.
Le Maire had previously announced a price-cutting deal in June with the 75 top retailers and suppliers but he has since acknowledged that less than half of them had acted on their promises.
Inflation in France, as measured by the consumer price index, eased to 4.3% in July on an annualised basis. Food inflation was at 12.7%, albeit slowing from 13.7% in June.
The French government is eager to bring down the price of food and other staples, as retailers warn consumers are reducing their purchases of essential goods because of the high cost of living.
Yesterday (30 August), French retailer Les Mousquetaires sounded a fresh warning on food prices.
Thierry Cotillard, the company’s boss told the RTL radio service that grocery prices in France are unlikely to fall by a great degree until March.
He said French consumers had reduced their shopping basket volumes by 5% and were buying less fresh produce such as meat and fish.
He added that he expects “no improvement” in the overall level of food prices before March: “It’s a real concern as the French are consuming less … It’s not good for the economy, it’s not good for business,” Cotillard said.
Cotillard’s comments followed those of Alexandre Bompard, the CEO of French supermarket giant Carrefour, who said earlier in the week that consumers were cutting back on essential goods because of the impact of inflation on their spending power.