The French Senate has accused the country’s largest grocers of engaging in “predatory practices” against manufacturers and farmers.
In its report, published yesterday (21 May), a Senate commission highlighted an “unbalanced distribution of value in the food chain”, which it said disadvantages manufacturers and farmers.
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The assessment, which looked at the profit margins of manufacturers and retailers over a six-month period, said it had found “the balance of power between most manufacturers and large retailers is now skewed in favor of the latter”.
The report was criticised by France’s retailers. The Fédération du commerce et de la distribution (FCD), the principal retail trade body in France, said the findings are “biased” and “completely disconnected from economic reality”.
Speaking to reporters yesterday (21 May), Senate member Antoinette Guhl said: “We have observed the existence of predatory practices by distributors on both industrialists and farmers.”
According to the Senate, France is dominated by four major retail chains: Leclerc, Carrefour, Intermarché and Coopérative U.
The report also mentioned three “hyper-dominant” buying groups that are used by French retailers: Concordis, which is used by Carrefour and Coopérative U, Aura Retail, used by Auchan and Casino and Leclerc.
The Senate carried out its investigation between December and May, conducting 189 hearings with members of agricultural unions, sales directors, buying managers and the local competition authority, among other representatives.
Gulh also told reporters that from a typical €100 ($116) spent by consumers on food, €8 goes to the farmer, €14 goes to processors and manufacturers, €35 goes to importers and €40 goes to large retailers.
Judith Jiguet, the director general of the FCD, said: “The food debate deserves better than oversimplifications, caricatures, and biased accusations.
“We demand transparency from distributors, but never from major food manufacturers: this complete lack of reciprocity leads us to question the report from its very first proposals.
“The inquiry commission, by conflating key economic indicators, misses the economic reality of the sector. Every day, retailers absorb price shocks to keep the French shopping basket affordable.”
The Senate has laid out 24 recommendations “to bring about a rebalancing essential for the future of our agriculture and our agri-food industry”.
These include getting large retailers to “submit an annual declaration of financial flows with European purchasing and service centers” and to be “fully transparent about back margins, in particular by making their amounts public”.
Reacting to the findings, French food-and-drink manufacturing trade body ANIA issued a joint statement with a group of other trade representative associations.
“Rapporteure Antoinette Guhl today released the conclusions of the Senate inquiry into the prices and margins of manufacturers and large retailers… Seven professional organisations representing all manufactureres of consumer goods established in France welcome this work and call on the government to act,” the statement read.
In a statement sent to Just Food, Intermarché said the Senate’s report was “an indictment of the retail sector”.
The retailer added: “All its recommendations point in the same direction: more constraints, more rigidity, with no reciprocity, at the risk of penalising both retail businesses and French consumers’ purchasing power. The major blind spot is the food industry giants: there is almost nothing on their dominant positions, the pressure they exert on suppliers, or the value they capture.”
