Such is taken who thought he was taking. After accusing the food industry of taking advantage of inflation to inflate their margins, Michel-Édouard Leclerc, the representative of the brand that bears his name, has just been dismissed in his goals by a senatorial report.
According to this report, approved on Tuesday July 19 by the Senate’s Economic Affairs Committee, there would be no “massive phenomenon of suspicious increases in supplier prices”and abuses in the food sector would rather be sought from distributors…
Excessively tense negotiations
For months now, manufacturers and distributors have blamed each other for the rise in prices on the shelves, the former accusing the latter of refusing to pay more for foodstuffs that have become more expensive to produce, and the latter accusing the former of asking unjustified price increases.
At the end of June, the attacks of Michel-Édouard Leclerc, judging “suspicious” half of the increases demanded by industrialists during the second round of negotiations requested by the government after the war in Ukraine, had led to the setting up of this flash mission from the Senate, as well as the announcement by Bruno The Mayor of an investigation by the General Inspectorate of Finance.
Inflation justified by the rise in raw materials
However, after having conducted hearings with all the players in the sector, as well as the repression of fraud, and the Observatory of price formation and margins, the conclusions of the senators are formal: “Inflation on shelves is largely justified by the rise in raw materials”, the price increases requested being even rather “reasoned” compared to the additional costs observed.
On average, during this second round of negotiations, manufacturers would have asked for price increases of around 10 to 12%, which will only very rarely be accepted. “As long as the negotiations are not closed, it is difficult to draw conclusions. But what we notice is that manufacturers have much more difficulty in passing on the rise in industrial raw materials (costs of transport, packaging, boxes, etc., Editor’s note)than to pass that of agricultural raw materials regulated by law”, explains Daniel Gremillet, senator (LR) of the Vosges, and president of the monitoring group of the Egalim law.
According to the report, the 3.5% increase obtained by manufacturers in March and the 5% they should obtain in July would only represent the share of agricultural materials, that of industrial materials being essentially absorbed in the form of a drop. of margins.
Requests for increases ranging from single to double for the same product
How to explain then that for certain categories of products, the increases requested by the suppliers could go from simple to double (+ 8% to + 22% on mineral water for example)? On closer inspection, these differences can be explained by reasons specific to each manufacturer, but at the very least reveal a problem of transparency on the part of manufacturers to justify their demands during the negotiations.
Since the Egalim 2 law, the latter must choose between three options making it possible to protect the price of agricultural material in negotiations with distributors. At 80%, they opted for the certification of the negotiations by a trusted third party, in this case an auditor. “The problem is that this certification comes after the negotiations, which prevents any peaceful form of discussion,” regrets Daniel Gremillet.
Questionable distributor practices
In this great cauldron of negotiations, distributors are not exempt from criticism, quite the contrary. In addition to having done everything to drag out the negotiations, so as not to have to raise prices too quickly, the report identifies several practices “contestable” as “increasing the pprice on the shelves without even the purchase price having increased”. If no brand name appears, the report cites the example of these distributors who would have gone so far as to break contracts in order to continue to supply themselves at the old price… while at the same time increasing prices in the rays.
Another drift pointed out, the tendency of brands to maintain, or even increase, penalties for late delivery, despite the malfunctions of the global supply chain. In theory, these logistical penalties have been severely framed by the Egalim 2 law, but the new legal framework would already suffer from numerous circumventions. And the Senate to point out this time the responsibility of a government which would have totally “disinterested” of this crucial subject.
——-
The 10 products that increased the most in June
+ 20.92% for frozen meats
+ 17.04% for pasta
+ 15.40% for minced meat
+ 14.21% for household pasta
+ 13.74% for mustards
+ 13.55% for oils
+ 13.08% for cooked pasta dishes
+ 12.79% for desserts and frozen pasta
+ 12.78% for paper towel
+ 12.66% for roasted coffee