French finance minister Nicolas Sarkozy has asked supermarket industry representatives to cut prices by 3% by September and 5% by 2005 in order to increase consumers’ spending power.
In return Sarkozy is offering to give supermarkets more flexibility in expanding their existing stores, reported Dow Jones International News. Under the new proposals, big supermarket companies, such as Carrefour, would no longer have to apply for permission to extend existing stores.
Sarkozy also proposed an end to brand range agreements between manufacturers and retailers. Such deals may include commitments by retailers to stock a whole range of products under a certain brand in exchange for certain benefits from suppliers.