French Finance Minister Bruno Le Maire pledged on Friday to take action against food retailers if they do not pass on lower wholesale prices to consumers struggling to cope with the rising cost of living.
Global wholesale food prices have been falling but French food retailers and their suppliers agreed a 10% average increase in prices in annual negotiations in March, which both sides said was necessary to cover higher production costs.
Le Maire has repeatedly called in recent days on both sides to reopen negotiations to ensure that the fall in wholesale food prices is passed on.
“If they don’t do it, we will summon them to the finance ministry and if that is not enough I will use all the powers at my disposal to ensure that the big industrial companies pass on the decrease,” Le Maire said during a visit to a company in northern France.
He did not specify what action that could include but the authorities responsible in France for consumer protection and competition answer to Le Maire.
Under pressure after forcing through an unpopular increase in the retirement age, President Emmanuel Macron’s government is eager to be seen tackling citizens’ everyday problems, such as surging food prices.
In the wake of the retailers and suppliers agreement, food prices rose by a record 15.8% in March from a year earlier, limiting a fall in overall French inflation to 6.6%, which is otherwise being pulled down by lower energy prices.
The increase came even though global food prices fell in March for a 12th consecutive month and are down 20.5% from a record high hit a year ago following Russia’s invasion of Ukraine, according to the United Nation’s Food and Agriculture Organization earlier this month.
“I don’t see why when prices go up companies pass on the increase immediately, but when the price of wheat falls, the price of pasta takes three months to fall. It’s unacceptable,” Le Maire said.
(Reuters)