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Inflation: Are we headed for a food price tsunami?

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“After going through a wave of inflation and the one which has already occurred, we are heading for a tsunami”, assured Michel-Edouard Leclerc this week. A tsunami that can hit France in 2023, the place inflation is much less robust than our neighbors however is felt arduous by the French. In October, food costs rose 11.8%.

Michel-Edouard Leclerc is thought for not having his tongue in his pocket. Invited on Tuesday morning to BFMTV, E.Leclerc the boss of the facilities sounded the alarm in regards to the “tsunami of inflation” which, in keeping with him, will sweep over France within the coming weeks. “Inflation isn’t just non permanent. With the brand new negotiations round Christmas that’s being ready in double figures,” he mentioned, referring to future price negotiations between main retailers and food producers.

“Today, there may be a new spherical of debate that the legislation (Igalim, Editor’s Comment) organized by We have price requests from all distribution teams. My colleagues have reported to me that there are not any requests for lower than double-digit will increase,” assured Michel-Edouard Leclerc, citing a number of examples of merchandise on which manufacturers are asking for price will increase. “Canned greens 17.74%, oil and spices 15.08%, canned food a little over 20%, espresso over 10%, pet food (Pet food, Editor’s Comment) 41%, starch 10.83%, poultry 13% and paper [qui] 11% progress continues”, indicated Michel-Edouard Leclerc, urging patrons to “go into battle mode”.

Arm wrestling between producers and mass distribution

“Manufacturers are doing their job, however I would like us to legitimize our proper to outcompete them. It considerations not solely the general public distribution, but in addition the canteen, the central buy of the administration,” explains Michel-Edouard Leclerc, who believes that the general public distribution is restricted by the Igalim legislation.

It is that because the starting of the struggle in Ukraine, negotiations and mass distribution amongst industrialists have been tense. Producers accuse hypermarkets of refusing to pay extra for food merchandise that value extra to provide, or of accelerating costs displayed on cabinets after they refuse to pay extra for these merchandise. Distributors, on their half, imagine that fastened price will increase are unreasonable. In September, the president of the Les Mousquetaires Intermarché group, Didier Duhaupand, accused Danone of making the most of inflation with “absurd” price will increase (round 12% on its water bottles).

Inflation in France
MDD – PhR

This arm wrestling takes place within the context of a industrial struggle between totally different manufacturers, every organising anti-inflation packages for their prospects, inside a sure variety of costs of their distributor’s merchandise, cash-back in loyalty or vouchers.

Finally, past price hikes, main retailers worry some product shortages, as identified to JDD by System U’s CEO on the finish of October. Shortage charges vary from 2% to greater than 10% – Dominique Schellcher mentioned in West-France that “inside a few weeks to a few months, odd merchandise are more likely to be briefly provide on the cabinets”. And to elucidate that “in keeping with agricultural cooperation, which represents a third of the model, many producers will quickly be pressured to decide on the vary, due to excessively excessive prices: farmers will determine, for instance, to desert poultry in revenue from crops.

The most costly merchandise, akin to charcuterie and cheese, and people who promote the least, thus producers face an explosion of their manufacturing prices, particularly on vitality gadgets…

A 16.9% enhance in recent produce costs

Over a yr, in keeping with provisional estimates by INSEE printed on October 28, client costs rose 6.2% in October 2022, after +5.6% the earlier month. On a year-over-year foundation, the core client price index rose +7.1% after +6.2% in September.

On food, we went from +9.9% in September to +11.8% in October. In element, recent manufacturing elevated, from +11.3% in September to +16.9% in October; Other food merchandise rose from +9.6% to +11%.

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