A summit meeting. This Wednesday morning, industrialists were invited to a breakfast at Bercy. “The subject: the price, inflation and renegotiations with distributors”, explains to Capital, Richard Panquiault, general manager of Ilec, who was present. The Minister of the Economy, Bruno Le Maire, tried to make the large multinationals hear the importance of reviewing the price of food products when the prices of raw materials drop.The objective: to break inflation by more than 17% on food products.Obviously, he found an echo.
“The 75 largest manufacturers of consumer products, which represent between ⅔ and ¾ of the brands sold in stores, have undertaken to discuss with the brands and to renegotiate their prices on the basis of objective criteria”, declares Richard Panquiault. Deadline: end of May. After this time, the government could activate the “name & shame” card. This measure aims to denounce brands that refuse to talk to distributors. A situation qualified as inadmissible according to Richard Panquiault: “What would be intolerable is for manufacturers not to respond to their customers’ demands. They must honor these appointments, whether they succeed or not”. Without batting an eyelid, the few manufacturers who were present this morning all took note, in a positive way, of this request from the government.
Lower prices from June
If all goes as planned Bercy, consumers can therefore expect to see the price of certain labels drop from June. “This means that prices will be renegotiated downwards in advance. So we can break the inflationary spiral, as we have committed to, by next fall”, declared Bruno Le Maire during this meeting. . But not on everything. For example, sugar has increased by more than 100% in recent months, making it impossible to renegotiate products using this ingredient. On the other hand, price drops could be visible for pasta, the price of wheat for which has fallen very sharply. Added to this good news, a bonus gift! The major food groups (⅓ of the members of Ilec, which brings together more than 100 manufacturers) have indicated that they want to accentuate and intensify promotional operations: more products concerned and with greater discounts. What lighten the wallet of the French.
For several months, the big manufacturers have been singled out and accused of making profits with the price increases they managed to pass in stores in March (around 10%). According to figures put forward by Bercy, Nestlé would post a margin of 17.1%, Unilever (Amora, Carte d’Or) more than 16%, Coca-Cola 30% and Danone 12%. An argument refuted by the general manager of Ilec. “This is global data. The French subsidiaries of these groups are the least profitable in Europe. In France, the profits of these brands do not exceed 1 to 2%”, he justifies. He adds: “we must not forget that the final prices practiced in stores are fixed by the distributors who also make margins. This delta also enabled them to finance the anti-inflation baskets”.
Discussions followed closely
This Wednesday morning, the National Association of Food Industries (Ania), Ilec, (the Consumer Business Liaison Institute which represents manufacturers of major national brands), and a few agri-food groups were present alongside Bruno Le Mayor, the Minister Delegate for Trade Olivia Grégoire, and the Minister Delegate for Industry Roland Lescure, For the time being, Bercy has not planned new meetings with distributors and/or manufacturers. But the next discussions between the two parties will be closely monitored by the government.
Inflation: the government wants to force manufacturers to lower their prices