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France Food and Drink Report Q2 2008Published by: Business Monitor International Published: Apr. 22, 2008 - 76 Pages Table of Contents
AbstractRising food prices have become a political issue in France and have also triggered several spats betweenproducers and retailers over who is responsible for the price increases. It is interesting to note that European Central Bank figures suggest that consumer food price inflation in France is actually below many other EU countries including Spain and Germany. However, this fact seems to have little effect on the public perception that certain French companies are profiteering from rising commodity prices, and a loss of purchasing power has become an increasingly salient political issue. In February 2008 France’s Prime Minister Francois Fillon claimed that food producers and retailers were using the rise in the price of agricultural products to expand their profit margins, and this view was also expressed by French President Nicolas Sarkozy who suggested that the price increases were not normal and that he was ready to intervene over the issue. This growing political controversy was partly prompted by the March issue of consumer magazine 60 Million Consumers, which printed a list of over 1,000 supermarket prices, based on information derived from supermarket websites, which suggested that the price of basic foods, such as yoghurt and pasta, had risen by between 5 and 40% over the past year. Retailers are quick to blame suppliers for these perceived price increases, and in February 2008 E. Leclerc launched a campaign against manufacturers who raise their prices above the rate of commodity cost inflation. This campaign culminated in the firm removing six product lines from its shelves including brownies made by Brossard, La vache qui rit (Laughing Cow) cheese made by the Bel Group and Pulco syrup made by Orangina. These developments prompted Prime Minister Fillon to launch a nationwide investigation into the country’s rising food prices. However, the initial results of the study, which looked at the price of 20 food staples in 5,700 retail outlets, suggested that food retail prices had risen by an average of just 5% over the last year. Although high by historical standards, this rate of inflation trails a long way behind the actual increase in the cost of many commodities, such as milk and wheat, suggesting that in actual fact firms are simply attempting to pass on some of the commodity cost increases to consumers. This has been borne out by the fact that both French retailers and food producers have generally reported only average results for the last year. The general secretary for the Federation of French Bakeries and Pastry Enterprises summed up the situation saying ‘[consumers] don't understand why prices have gone up like this; they think that someone is profiting from this. But it's not us. We're paying.’ Get Full Details About This Report >> |
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