2023-08-31 19:56:21
The cross : Is the price cap of 5,000 references in stores promised by Bruno Le Maire a viable and relevant measure to reduce inflation?
Philippe Goetzmann : That prices stop rising or even fall a little is now a necessity for the French. Moreover, everyone has an interest in it – consumers, industrialists and large retailers – to prevent consumption from continuing to collapse.
The government is probably hoping for a mechanical effect with the capping of the price of these 5,000 products, but I don’t think it can influence the prices for all that. These are determined by the market and competition.
In addition, Bruno Le Maire promises stagnation or even a decline, which is, even without a ministerial announcement, a probable reality: in recent weeks, inflation has continued to rise, but less sharply, despite a slight rise in August. This is because we are touching the asymptote of this inflationary crisis.
Is there a more effective lever?
P. G. : The real subject is not to obtain commitments from the actors, but to change the competitive situation that exists between them, so that the economic game leads to moderation. Bruno Le Maire has understood this: this is why he announced the progress of trade negotiations between large retailers and manufacturers.
Normally scheduled for spring 2024, they will take place this fall. Distributors will be able to request price reductions from manufacturers five months in advance. This allows the Minister of the Economy to affirm that the prices on the shelves will decrease from the beginning of the year 2024.
Why don’t shelf prices automatically adjust to raw material prices?
P. G. : Because in France, the calendar is fixed. The prices between distributors and manufacturers are therefore fixed in the spring, the conditions which are determined there are valid throughout the rest of the year. But the economic reality is different: everything fluctuates all the time. We are therefore the country where commercial negotiation is the most supervised and the most complex, but also ultimately the most inefficient.
This system has existed for twenty-five years and was aimed at a form of price control to protect those upstream in the chain: French farmers. But this is not true for others, notably our European neighbours, where the repercussions are more real time. As a result, imported foreign products are less constrained than those produced in France. So by preventing the adaptation of economic actors, we strangle companies and the repercussions are logically on the consumer.
Bruno Le Maire nevertheless ensures “a mandatory and immediate impact” of the drop in wholesale prices on prices on the shelves…
P. G. : It is a double illusion. First, the products sold in stores, with the exception of fruits and vegetables, are complex. So there is no guarantee that if the price of tomato coulis drops, that of the pizza made from it will follow, simply because there are other parameters at play.
In addition, in France, nothing prohibits companies from making a profit. These were put in difficulty at times, sought to restore their cash flow by increasing the price of the products. These are their choices and they must assume them: they will be punished by losing some of their consumers, who will look elsewhere. This is precisely what explains the recent success of the distributor E.Leclerc, which is gaining market share in all areas.
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