Yahoo Finance Macron strongarms French supermarkets into cutting food prices
Emmanuel Macron has strongarmed France’s supermarkets into cutting food prices by as much as 10pc or face the threat of financial sanctions.
French finance minister Bruno Le Maires said on Friday that the country’s largest food companies have pledged to reduce the prices of hundreds of products from July as inflation squeezes households.
Mr Le Maire told the French news channel BFM TV: “On a certain number of products where wholesale prices have fallen, then the (retail) prices will have to fall too, by two, three, five, maybe even 10pc.”
It comes as Rishi Sunak works on plans to introduce French-style price caps on basic food items amid growing concern in government about sustained pressure on household finances from inflation and the rising cost of borrowing.
In March, French supermarkets agreed to charge the “lowest possible amount” for essential food products, in a deal that was extended in May for a further three months.
Mr Le Maire has criticised food companies for making “undue” profits after failing to pass on the benefits of falling energy prices and raw materials to shoppers.
While the previous deal had effectively capped prices, the new pledge means French shoppers will now start to see prices fall. Poultry, pasta and oil will be among the items that will be affected.
Mr Le Maire said: “As soon as July, prices of certain products will go down.
“There will be checks and there will be sanctions for those who don’t abide by the rules.”
French food price growth hit a record high of nearly 16pc in March but has since cooled to 14pc.
Food price inflation in the UK hit 19.2pc in March and was still at 19.1pc in April.
This was despite the fact that the cost of raw materials in food production has been falling since last summer. The Bank of England has warned that food producers are not passing on cheaper costs because they are “rebuilding” profit margins, which were squeezed last year.
