French food manufacturers have agreed to reduce the price of basic items from next month, the country’s finance minister Bruno Le Maire has said.
The 75 companies that make 80% of French food, including the likes of Nestlé and Unilever, will reportedly lower prices from July.
It means “hundreds” of basic items including pasta, sunflower oil, chicken and animal feed will be reduced as the cost of food production in Europe eases.
Speaking on French TV channel BFMTV’s Face-à-Face show, Le Maire said: “Poultry must come down [in price] because production has come down. Pork and beef is different because production [costs] remain high.”
For milk, he noted there would be no price reduction.
Just Food has contacted the Ministry of Economy and Finance for comment on the proposed deal.
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In May, provisional headline inflation in France was 5.1% year on year but this was eclipsed by grocery inflation, which was up 14.1%. This provisional figure was slightly slower than the rate of food inflation in April, which rose 15%. The consumer price index for energy, by contrast, slowed to a 2% rise, down from a 6.8% rise in April.
Food companies last month agreed to re-negotiate with retailers on pricing following pressure from Paris. Le Maire threatened to either use tax measures to recover what he considered to be excessive profits or name and shame companies if they did not accept talks with grocers.
It follows an agreement reached in March that intended to beat inflationary pressures on consmers by reducing retailers’ margins. The deal, dubbed the “anti-inflation quarter”, comes to an end this month.
At the time, Le Maire said the deal “will allow us to have the lowest possible prices on a number of everyday products for a period of a quarter”.
He said the margin squeeze “represents an effort of several hundred million euros granted by distributors for the purchasing power of households”.
Just Food has approached food manufacturing trade body ANIA for comment.