Last days for commercial negotiations between large retailers and SMEs (Small and medium-sized businesses) and ETIs (Mid-sized businesses) in the agri-food industry. For these companies with less than 350 million turnover, agreements with distribution on prices must be signed before Monday January 15 at midnight. Léonard Prunier, president of the FEEF, the Federation of Enterprises and Entrepreneurs of France, is participating in these discussions.
franceinfo: Léonard Prunier, you are president of the FEEF, and you represent 22,000 SMEs and mid-sized companies in everyday consumer products. The deadline is Monday January 15 at midnight. Where are you ? Will everyone at your house sign?
Leonard Prunier: We remain confident that everyone will sign. We all need each other, we need to find an agreement. On the other hand, the negotiations are not finished and overall, we have not yet necessarily found the right balance in the relationships and in the fair selling price between us, industrialists/SMEs/ETIs in the region, and distribution.
How many signatories do you have at this stage?
In the last survey last week, Friday, we were at 53% of contracts signed. Afterwards, it will go very quickly. Either way, we all have an interest in finding an agreement and we need to sign before Monday evening.
What were you asking for in terms of prices?
So our members asked for an average 3% increase. Why an increase? We talk a lot about reductions, but our costs continue to increase. We must be aware that we paid 7.3% more for agricultural materials, like industrial materials, compared to last year. Energy in businesses is up 62%. So on average, our companies asked distributors for a 3% increase.
And what do you get?
For now, we are seeing the first returns. We are on average between 0 and a drop of -1%. So it is not satisfactory, because our companies need results to invest, to hire. Already between 2021 and 2022, we went from 26% to 30% of companies losing money. And there, we announce the figure of 72% of companies which have further reduced their results.
But you sign anyway.
Yes, we sign because we need to find an agreement. We need to have our references on the shelves, but we’re going to have to find a way to find the right price. Today, we are not getting the right price in our companies.
What happened then? Did you fail to make your needs heard during these negotiations?
We cannot make them fully heard. And then I think that the negotiation system is very complicated, much too complicated. Today, we detail everything, we put calculation formulas, we see that it doesn’t work well. It was implemented with EGALIM the passing on of the price of agriculture to industrialists. And that’s very good. We must continue. We need a strong agriculture that can invest. But we have not been protected for all of our costs. So we need to review the law and above all simplify it.
Your negotiations still come before the big manufacturers. That’s something that satisfies you.
Ah, that was really a major breakthrough. It must be admitted that in the commercial relationship, this is the only part of the law where there was no difference, while all the parts of the law are there to restore the balance between the weaker party to the contract and the strongest part. So that was really a breakthrough. Moreover, as we have clearly seen, all the subsidiaries of large international groups have tried to switch to the same date as the SMEs. So that means there is an issue. It is above all an issue of access to shelves. But afterwards, we will have to take the time to go further because we need a fair price.
What would you like?
So we need to open a global debate. We can’t just take the calendar. We need to see at what price we can sell, how our prices are applied upwards or downwards, depending on variations in our costs. What business plans can we develop? We need to settle down, to take a break. On this, Gabriel Attal, he said during his installation, wants to liberate our economy with the drastic simplification of the lives of businesses and entrepreneurs. And in the commercial relationship, we need a liberation and to drastically simplify our commercial relations.
The Head of State, Bruno Lemaire, also talks about simplification a lot. It’s a word that comes up a lot in the mouths of members of the executive. Is this going in the right direction?
This is going in the right direction. We, the FEEF, are making proposals. And in fact, what we must understand is that in the industry-SME/ETI relationship, which is very different from the relationship between multinationals and distributors, we just need to sell at a fair price. , which pays everything, the agricultural world and our businesses. We are not looking for the highest possible price, not at all. We want a fair price, so that it works for the distributor, and that the consumer gets the right price.
You have not yet obtained the price increases you requested. But are you able, in these negotiations with distributors, to obtain, for example, exposure on shelves, access to promotion?
Oh yes, at the FEEF, we developed the “PME+” label, so that consumers can identify products manufactured by French SMEs and mid-sized companies. And we see that there is a very good reception from distributors at this level. So we manage to find agreements, to highlight our products. Now we have to find the right price, knowing that there is very strong competition between distributors. They too are looking for consumers, so it’s quite a balance to find.
You were talking about your charges. What are your costs in 2023? And a side question, were they reflected in your prices?
Overall, the judge of the peace is the net result, what we call profit. As for the consumer, between salary and expenses. And overall, we see that the gap is narrowing more and more, so our profits are decreasing. And this is worrying for the future because it means less investment and less job creation. Our companies in 2022 further increased their workforce by 3.4%. So we remain confident in the future. We are like all the entrepreneurs involved in our territory. But at some point, we will have to be able to increase our results for investment, for the future.
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