The commercial renegotiations have been going on since March and “the level of tension currently reached” between suppliers and distributors “makes shelf breaks plausible”, underlines the Senate in a report published on Tuesday night.
Since March and at the request of the Government, manufacturers and distributors have renegotiated the sales prices of certain food products, whose production costs are subject to high inflation from the end of 2021, further aggravated by the war in Ukraine.
“Gain time”
The former reproach the latter for refusing to pay more for food that costs much more to produce; accept increases linked to agricultural raw materials but refuse to pay more for packaging or transport, for example; raising prices on the shelves even though they refused to pay more for these products; or to “buy time” to continue to benefit from pre-war prices in Ukraine.
As for distributors, they criticize manufacturers for asking for unjustified price increases, or different prices from one manufacturer to another, and for a lack of transparency. In these commercial disputes that have been going on for several months, the Senate has come out in favor of the industrialists, since “the work of the Egalim surveillance group, particularly those carried out with the public authorities, have not made it possible to observe, more beyond these particular cases, a generalized phenomenon of excessive increases”.
According to data from the negotiations follow-up committee of July 7, 40% of the renegotiations for national brands (such as Danone, Nestlé, Coca-Cola) have concluded, and 90% for private brands (for example, Marque marque or Monoprix ). Illustration on the shelves, according to the Consumer Business Liaison Institute, the increase in the prices of private label “double that of national brands: +7.4% compared to +4.2%”.
disinterested government
The progress of these renegotiations is, however, “very heterogeneous according to the distributors”, judges the Senate. On the retail side, there are good and bad students, who are never named: some purchasing centers “would have totally rejected the requested price increase in more than a third of the cases, and would not have totally accepted it only in less than 10 % of cases”. Faced with a situation that seems stagnant, the Senate also points the finger at the behavior of a “Government that seems uninterested in the situation”, write the speakers.
Although agricultural, agro-industrial and distributor representatives meet every Thursday to follow the progress of trade negotiations between private actors, “according to several professionals”, the usefulness of the trade renegotiation monitoring committee “is far from being evident since no decision is recorded”. there,” report the senators.
Being private the negotiations that are carried out between manufacturers and distributors, the Senate recommends in particular to establish a monitoring table that allows knowing what increases have been approved, accepting a proposal from the National Association of Food Industries (Ania). According to “certain public authorities heard” by the Senate, the automatic price review clauses between manufacturers and distributors provided for by the Egalim 2 law are also questioned as the activation conditions are “at unattainable levels”.
A processor must, for example, justify a 30% increase in a raw material to be able to renegotiate a price and the review clause only applies to a single material, explains the Senate. The distributors were able to take advantage of this clause “to request a large amount of very precise information on the composition of the rate” and “in certain cases, the signing of the clause was conditional on this greater, even ‘exaggerated’ transparency”.
Source: BFM TV
