France Intensifies Financial Fightback Against Food Inflation

By Olivia Weaving August 31, 2023

Doubling price-capped products and threatening checks and sanctions, France’s financial chief picks up the baton in consumers' battle against surging food costs.

In a determined move to throttle accelerating food inflation, Bruno Le Maire, France’s finance minister, has pronounced that the tally of price-capped items in French supermarkets will jump two-fold to reach 5,000. The announcement on Thursday has come hot on the heels of another month of buoyant food inflation, which clocked a robust double digit.

Conveying his views to France2, a leading French broadcaster, Le Maire lambasted a group of multinational corporations, prominent among them PepsiCo (PEP) and Unilever (UL). He censured them for failing to contribute effectively towards helping French citizens grappling with skyrocketing costs.

According to the finance mogul, these price caps, which have been settled with producers and distributors, are aimed at “permanently terminating the cyclical upswing in food prices." He noted these products constituted roughly one fourth of the average offerings in any supermarket.

In the month of June, Le Maire had revealed that a staggering 75 top-tier food corporations agreed to prune prices on an array of items, commencing from July, following a slump in the costs incurred for raw materials. However, Le Maire said during the recent announcement, many dealers did not uphold their end of the promise by transferring these saving to the customers. Consequently, he announced a compulsory, immediate reduction in supermarket prices for those goods where the producers had already scaled down the pricing.

Furthermore, Le Maire added, these mandates as well as agreements within the industry would be actively supported by checks and sanctions. In his scathing criticism of huge industrial conglomerates, he named Nestle, Unilever, and PepsiCo, accusing them of doing “a little, but not enough,” to help the French public combat high prices.

While refraining from naming specific companies, he denounced those that vaunted about reducing prices, but only minimally so, by mere fractions of percentage points.

“The French populace needs to see tangible, concrete reductions in prices,” stated Le Marie. Also, he added, “unfair practices,” like shrinking the weight or volume of products, but maintaining a high price, must be firmly stopped.

Noteworthy statistics released Thursday by a prominent national think-tank suggested that food prices in France surged by 11.1% this month, compared to the same time last year. Although the rates were slightly less than recorded in July, they were still over two-fold the general inflation rate. Olesya Dmitracova contributed to this report.