can the prices of certain food products really fall in 2024?

“I am sure that certain prices will fall,” says Bruno Le Maire. The Minister of the Economy is even considering a decline at the end of January. Can we really consider it?

Easier to declare than to obtain. This is not a promise from the Minister of the Economy but an objective which is, according to Bruno Le Maire, achievable. Other voices in this direction are being heard. That, for example, of the boss of the Mousquetaires/Intermarché. Thierry Cotillard confirmed this on Saturday January 6 in West France : “there will be price reductions for consumers”. Like his counterparts from other major retail brands, the boss of Intermarché claims to be working on solutions with food multinationals, but he recognizes that the negotiations which will end on January 31 are difficult.

There is a desire on both sides to find solutions, but the economic context is complicated, even if the context has changed. In 2023, in the midst of trade negotiations, inflation on food products was just over 15% over one year. In January 2024, we are at 5%. Still too high, but it opens doors. Hence the importance of negotiations until the end of the month.

An unguaranteed drop in prices

Return to pre-crisis prices? To promise it would be to lie. The objective of commercial negotiations between distributors and producers is to obtain price reductions on essential food products, but also butter, oil, poultry, etc. For upstream producers (farmers, breeders, cereal growers, etc.), the room for maneuver is narrow, between the increase in the price of raw materials (cereals to feed animals), the increase in wage costs since the end of Covid… what is the point? Adds climate disruption (droughts and floods which, alternatively, weigh on harvests). Finally, there are the heavy investments required by the greening of industry and production.

As a reminder: a decline in inflation does not mean a fall in prices. A decline in inflation means a slowdown in the rise in prices. For all the reasons just mentioned, and whatever the outcome of the producer/distributor negotiations due January 31, food prices should not fall in the coming months, continuing to progress but at a lower rate. less sustained pace.