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Soaring farm prices: Manufacturers are playing the game, according to the Senate

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Following incendiary statements by Michel-Edouard Leclerc, accusing manufacturers of inflating their margins by taking advantage of inflation, senators investigated. And they are not to blame.

The Senate Economic Affairs Committee heard from dozens of stakeholders. Since the accusations by Michel-Edouard Leclerc on BFM TV / RMC, at the end of June, where he denounced “suspicious” increases in half of the tariffs requested by the food industry, the organization has questioned distributors, officials from the agricultural world . associations, policies and repression of fraud (DGCCRF).

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Conclusion of the report presented today: “there does not seem to be a massive phenomenon of ‘suspicious’ rises and a generalized attempt by manufacturers” to take advantage of inflation to inflate their margins.

According to these senators, “most of the requested increases are justified” by production costs that have skyrocketed since last year, before the war in Ukraine, by the post-covid economic recovery, the consequences of the climate crisis ( droughts, floods, etc.) and the initial geopolitical tensions.

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The distributors could not prove otherwise, indicates the document of about sixty pages. The senators regret even more the denunciations of part of the increases, since they have “strained relations, which were already very tense” between distributors and manufacturers.

Commission President Sophie Primas summed up the findings on Twitter and called for calm:

Level of tensions “rarely reached”

Despite the legitimacy of the price increase, “questionable practices persist on both sides”, the parliamentarians also underline, highlighting in particular the presence of “blackmail due to end of stock, or the fact of increasing prices on the shelves without not even the purchase price. having increased.”

In fact, we end up with a “rarely reached level of tension”, which amplifies the threat of supply cuts: manufacturers do not produce at a loss, when distributors do not want to pass on the requested price increases.

At the center of the conflict, the price of intermediate industrial consumption (energy, packaging or transport) – agricultural raw materials, having been protected by the Egalim 2 law. The mediator of agricultural trade relations, in charge of the negotiations, thus calculated that for the last winter season, price increases reached 3.5%. Far, far from the 7.2% claimed at the time by the manufacturers.

recommendations

In an attempt to improve the situation, locally and internationally, the Senate Economic Affairs Committee lists a series of recommendations. For example, it is proposed, at a global level, “to regulate the amount of operations for the purchase and sale of food products (cereals, oils, etc.) as well as their number”, or to extend, in France, the possibility of excluding products from the mechanism for raising the threshold of resale at a loss by 10%, without interprofessional unanimity being necessary.

The Senate, which publishes the report today, nevertheless takes a position on this point that is very opposed to the declarations of Michel-Edouard Leclerc, and to the claims of the distributors.

Author: Paulina Tattevin
Source: BFM TV

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