In upcoming annual negotiations, French supermarket retail groups may push for price reductions ranging from 2 per cent to 5 per cent from food manufacturers, as revealed by Thierry Cotillard, President of Les Mousquetaires, during discussions with lawmakers.
French retailers, including Les Mousquetaires, have raised concerns about what they perceive as unjustified price increases by major consumer goods companies such as Unilever and Nestle. The government has also exerted pressure on these manufacturers to reduce prices.
Cotillard pointed out that lower costs for raw materials and energy have made the production of food and other consumer goods less expensive. Therefore, he believes that prices agreed upon in negotiations should reflect these cost savings.
He also highlighted that Les Mousquetaires’ business in Portugal has successfully negotiated lower prices with consumer goods companies because price discussions there are not confined to an annual timeframe. Les Mousquetaires operates in Portugal under the banner “Os Mosqueteiros.”
Cotillard emphasised the legitimacy of their request to have the flexibility to negotiate prices throughout the year, similar to their counterparts in Portugal and Spain.
Currently, France has regulations specifying an annual window for price negotiations, typically from 1 December to 1 March. However, there is consideration of legislation to advance these negotiations, with the aim of initiating talks earlier and concluding them by 15 January.
During the discussions with lawmakers, Carrefour CEO Alexandre Bompard expressed a plea to consumer goods groups to trust retailers and allow them to negotiate. Systeme U CEO Dominique Schelcher and E Leclerc co-president Philippe Michaud were also questioned by lawmakers as part of a parliamentary committee on economic affairs.
The issue of buying alliances in Europe was raised during the discussions. Some supermarkets use these alliances to collectively negotiate with consumer goods firms. Lawmakers questioned whether such alliances enable retailers to circumvent French regulations on pricing. However, Michaud denied that these alliances are used to evade French law, explaining that they are employed to enhance retailers’ bargaining power against manufacturers.
This proactive stance by French supermarket retail groups underscores their commitment to ensuring fair pricing practices and cost considerations within the industry.