During a roundtable discussion with executives, the head of retailer Les Mousquetaires informed lawmakers that supermarket conglomerates in France may request reductions in prices ranging from 2% to 5% from food manufacturers in their forthcoming annual negotiations.
French retailers have voiced their disapproval of price increases by consumer goods giants such as Unilever and Nestle, asserting that these hikes lack justification. Simultaneously, the government has exerted pressure on these consumer goods manufacturers to reduce their prices.
According to Les Mousquetaires President Thierry Cotillard, the decreased costs of raw materials and energy translate to lower production expenses for food and other consumer goods. Therefore, the prices established during negotiations should align with these cost reductions.
“We should probably be able to demand that the big (consumer goods) groups cut prices by between 2% and 5%,” he said.
Cotillard explained that their operations in Portugal, operating under the banner of Os Mosqueteiros, have successfully negotiated reduced prices with consumer goods companies. This success is attributed to the fact that price discussions in Portugal are not confined to an annual timeframe.
“Our request, to be able to negotiate throughout the year like our friends in Portugal and Spain, strikes us as perfectly legitimate,” said Cotillard.
France, which currently enforces regulations specifying an annual timeframe for price negotiations, spanning from December 1 to March 1, is contemplating a legislation change that would advance these negotiations. The objective is to initiate discussions promptly and conclude them by January 15th.
“We are asking you, in the relationship we have with consumer goods groups, to trust us and to let us negotiate,” Carrefour CEO Alexandre Bompard told lawmakers.
Lawmakers in a parliamentary committee on economic affairs also posed questions to Systeme U CEO Dominique Schelcher and E Leclerc co-president Philippe Michaud.
Numerous lawmakers raised inquiries with the executives concerning purchasing alliances in Europe, a strategy employed by some supermarkets to collectively negotiate with consumer goods manufacturers. They inquired whether these alliances enable retailers to circumvent French pricing regulations. France’s Senate had previously highlighted in a report that such alliances provide a means for retailers to bypass French legal requirements.
Michaud refuted the notion that buying alliances enable retailers to sidestep French legal regulations.
“We buy as a group, not to evade any law but in order to have sufficient clout against manufacturers,” he said.