Same place, same actors, same demands… There will be an air of déjà vu in the corridors of Bercy this Wednesday, August 30. With the start of the new school year approaching, the Minister of the Economy, Bruno Le Maire, and the Minister Delegate for Trade, Olivia Grégoire, are bringing together distributors to take stock of food inflation. As four months ago, it will then be the turn of the industrialists to be received, the next day, at the ministry. The two sectors will therefore again make separate rooms to avoid any bloodshed.
Because despite the latest update in May and the many calls for cooperation – including the threat, brandished by Bruno Le Maire, to publish the names of the agri-food manufacturers who have refused to make cuts – prices in food continue to rise tirelessly, much faster than general inflation. In July, they increased by 12.7% over one year. The only reason for hope: the growth rate has been slowing down for three consecutive months, but the latency effect is undeniable. “There is a delay between when the causes of inflation disappear and its translation into prices for the consumer. At the beginning of this movement, when the cost of raw materials was increasing, prices initially remained very wise Today, we are experiencing the opposite phenomenon. There is something quite mechanical”, points out Philippe Moati, co-president of the Observatory society and consumption (Obsoco). However, the situation should improve in the coming months, as the prices of energy and certain agricultural raw materials, such as wheat, drop significantly. “The government is in a hurry. Purchasing power is the number one concern, but it will get better and better. All the lights are rather green,” continues the economist.
Distributors not satisfied
Whatever, the pill has still not passed on the side of the distributors who denounce again and again the inflated margins on the industrial side of the food industry. “The big multinational brands are the ones that drag their feet the most. For years, the managers of these companies, which are sometimes based on the other side of the Atlantic, have found that in France it is very difficult to pass increases. There has been a windfall effect this year with what happened in Ukraine. They do not want to return to the situation before. It will be very difficult to get the large groups to move “, predicts a distributor.
The subject should return to the table on Wednesday. “The objective of this meeting is to take stock of the commitments and what has been implemented so far, both by the brands and by the manufacturers”, specifies the cabinet of Olivia Grégoire. In mid-July, 39 agrifood companies, including Bonduelle, Barilla and Danone, pledged to set up discounts on a total of more than 1,000 products. Promises that are struggling to produce their effects on the portfolio of the French. “Today, the effort is usually targeted on a few SKUs, so there is no visible drop on the shelves. The same goes for the anti-inflation quarter. If the consumer buys the products affected by this operation, he will have zero inflation, or even lower prices. He still has to buy exclusively the products concerned, “recognizes the minister’s office.
On the side of distributors, the discourse has not changed. And it is not the questioning that will change the situation. “Almost all of the big brands have announced fairly significant increases in their results. They say it very clearly in private: this is an opportunity for them to increase their margins. as possible”, plague Jacques Creyssel, general delegate of the Federation of Commerce and Distribution (FCD). The big brands are demanding that the trade negotiations, which should open in early November, take place in an accelerated manner. Another burning request that is going to be addressed at the meeting.
Fewer national brands in carts
But what will it really be used for? In recent months, Bruno Le Maire has regularly banged his fist on the table to demand a drop in prices. So many sword strokes in the water. “We end up being a little skeptical. Speaking out is good, but if they are not acted upon, that is not enough. When you ask the French if prices are falling, they realize that is not the case”, sighs Jacques Creyssel. The Bercy tenant finally seems powerless in the face of this dragging commercial dispute.
“We are in a market economy, where normally price control has officially disappeared since 1986. There is freedom for players while respecting the principles of competition. Obviously, the role of the State is to bring them together and tell them, but I don’t think he can really do more,” said economist Philippe Chalmin, president of the Observatory for the formation of food prices and margins. Among manufacturers, however, we remain calm. “It’s normal that we are the target, we find ourselves in an unprecedented situation. But we have always been in dialogue and transparency. It is also the game of distributors to want to offer the best prices to their customers. because these are selling points. There are not on one side the bad guys and on the other the good guys”, affirms a large French group.
A strategy which could however end up turning against the industrialists. “The problem is still there in our stores. Our customers tell us about it. As a result, national brands tend to be less present in shopping carts, while those of distributors are gaining ground”, assures Thierry Desouches, the spokesperson for U system. And at the same time, the food consumption expenditure of the French is decreasing. Philippe Moati of Obsoco agrees: “Manufacturers are taking their time to lower prices. They are paying for it because volumes are falling. The big brands seem to be playing a dangerous game”. However, this strategy must be put into perspective: before the war in Ukraine, in the absence of inflation, these groups had little leeway on prices, and their profitability was under pressure. “This is called margin reconstitutions. Some manufacturers took advantage of the situation, but a good part also stuck out their tongues before”, recalls Philippe Chalmin. The negotiation still looks difficult.