French retailers have agreed to prolong efforts to charge the lowest possible amount for some essential food items as high consumer-price increases continue to hurt households, Finance Minister Bruno Le Maire said.
(Bloomberg) — French retailers have agreed to prolong efforts to charge the lowest possible amount for some essential food items as high consumer-price increases continue to hurt households, Finance Minister Bruno Le Maire said.
The three-month campaign, announced in early March and dubbed the “anti-inflation quarter,” was due to come to an end on June 15.
Le Maire also said he’ll summon big food producers and retailers to the Finance Ministry from next week to speed up commercial renegotiations so recent declines in producer costs are reflected on supermarket shelves.
“Food manufacturers must help with lowering prices,” he said Wednesday in an interview on France Info radio. “Wholesale prices are coming down — wheat prices, for example, freight prices. Food manufacturers must pass that through to retail prices.”
The pace of inflation in the euro area’s second-largest economy has remained stubbornly high, unexpectedly accelerating to 6.9% in April on energy and services costs. The Bank of France has said food price increases probably won’t start to slow until the second half of the year.
The worst cost-of-living crisis in a generation is hurting consumers at a time of widespread anger over President Emmanuel Macron’s decision to raise the minimum retirement age by two years, adding pressure on the government to show it’s taking steps to ease the situation.
Le Maire said the “anti-inflation quarter” had so far led to a 5%-7% decline in prices for affected items. He said in March that supermarket chains would take a hit to their margins amounting to several hundred million euros.
He’s warned that the government will crack down on large food manufacturers that are boosting their margins at the expense of consumers. He previously gave them until the end of May to restart negotiations with retailers.
European Central Bank officials have been increasingly highlighting the role of surging profits in the euro zone’s most severe spell of inflation, with President Christine Lagarde warning in late March of a “tit-for-tat” dynamic where widening corporate margins propel salaries and prices ever higher.
French yogurt maker Danone raised its sales forecast last week as consumer demand remains resilient despite the highest price increases in decades. Nestle SA and Coca-Cola Co. have reported stronger-than-expected sales lately, while PepsiCo Inc. and Procter & Gamble Co. have raised their revenue forecasts.
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