Commercial Negotiations: There is no general price reduction on the shelves this year

On this Wednesday evening, January 31, a few hours before the commercial negotiations between the big retailers and their biggest suppliers, everything was still not settled. But, a brand representative warned a while ago, “There will be no big surprises, nothing revolutionary. »

Surprisingly, therefore, the discussions initiated between brands and agro-industrial producers will not lead to a general reduction in prices displayed on supermarket shelves. But they mark the end of a surge in prices, which have jumped more than 20% in two years in food.

“It is definitely the end of the Great Inflation”

“Overall, we can expect slight price inflation in the order of 2 to 3%, the end of the Great Inflation,” notes Jacques Cressel of the Federation of Commerce and Distribution. (FCD). And consumers will be able to see some reductions: “This is for sunflower oil and grain-based products, especially pasta,” he says. In contrast, products such as chocolate and olive oil will continue to increase. »

Distributors are also announcing price cuts on ready-to-eat meals, “due to reduced energy costs” or even hygiene products. Some have already implemented reductions on shelves, such as Carrefour or Intermarch.

These annual negotiations, which usually end on March 1, were brought forward by the government, which wants to pass as quickly as possible a reduction in the prices of certain products (soft wheat, rapeseed or sunflower oil, etc.). Farmers’ anger came to influence discussions between multinational companies and distributors, which invited themselves to the doors of some supermarkets and industrial producers.

A few hours before the end of these bitter negotiations, some players in mass distribution also received a letter from UNEL, the national union of dairy farmers that supplies the giant Lactalis: “The dairy farmers we represent will not understand that your brand is what it is. “The group has a “partner” that does not respect Egalim”, writes Unel, in an indication of the impasse between the breeders’ organization and the group, who called for commercial arbitration. Bersi, for his part, called for suppression of repression on contracts between brands and their suppliers (DGCCRF). For this, the General Directorate announced to strengthen controls.

“The current negotiation system is running out of steam”

In this tense context, these brief discussions did not lead to an agreement at all this Wednesday. “When in some discussions, a manufacturer demands a 3% increase compared to a distributor who asks him to reduce his prices by 3%, it means that they do not even agree with the market vision. It makes things more complicated,” says Richard Penquilt, president of Ilec, the union that brings together the biggest businessmen.

System U Group boss Dominik Schellcher on Tuesday pointed to “the current negotiation system that is running out of steam”: “Negotiations for only two and a half months, not being able to adapt throughout the year, that can no longer hold. Up »