Food prices continue to soar in shops: +17% over one year, according to INSEE. This surge in prices should soon calm down according to the latest projections, and even reverse. But when will it hit supermarket shelves? As soon as possible, asks the Minister of the Economy Bruno Le Maire to the food manufacturers in a letter that franceinfo has obtained.
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A letter intended to put real pressure on manufacturers. The statement is obviously very polished, but Minister Bruno Le Maire is quite clear in his requirements. “Several indicators lead the Banque de France to envisage a decline in inflation in the first halfhe wrote. Our fellow citizens, who have been asked to assume the consequences of the inflationary context on the price of the products they buy daily, would not understand, rightly, that the price reductions to come upstream in the economic chain are not returned to them symmetrically.”
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This deserves some explanation. It should be noted that prices are theoretically fixed from one year to the next during annual negotiations between the food industry and large retailers. The Egalim laws, resulting from the states general of food, have already provided that these negotiations can reopen in the event of a surge in the prices of raw materials. This is what happened last year with the war in Ukraine, when the price of gas soared. However, gas is needed at all levels, to manufacture nitrogen fertilizers, to cook food, to manufacture glass, among others. Manufacturers obtained a 10% increase in their prices on average.
A necessary renegotiation of downward prices
This time, the minister takes the lead and explains that this renegotiation must work in both directions, upwards and downwards. In other words: if the price of raw materials falls, everyone must benefit. The Banque de France expects inflation to fall by mid-year,
and therefore lower food prices.
This decline has already begun. The Food and Agriculture Organization of the United Nations, FAO, notes that food prices have fallen by 20% in one year. Hence the Minister’s conclusion in this letter sent to manufacturers, but also addressed to supermarkets: “We are now asking suppliers, major manufacturers and players in the mass distribution sector to register voluntarily (…) with a view to infra-annual renegotiation of contracts, so that the sale prices are reviewed at the drop (…). We urge distributors (…) to ensure that any price reductions that may result from this renegotiation are returned to consumers when the time comes, in full and without delay.”