This is the second round! As soon as the annual trade talks ended on 1 March, the government called for more talks between the parties.
“Companies submitted their price change requests to brands in December, They say in the Ministry of Agriculture and Food. But these companies or their federations have warned us that there has been a very sharp increase in production costs since then due to the consequences of the war in Ukraine and invalidated their forecasts. »
A committee meets every week
Distributors and suppliers signed a good conduct contract that translates into moral commitments to be transparent. Also, every week, all parties meet for a “monitoring committee” of these discussions, under the auspices of the government.
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For consumers, this should result in a soaring price in 2022, according to the judges of publisher and mass distribution specialist Olivier Dauvers. “Historic and one-of-a-kind”. “Last year, some products have already experienced certain increases, said. This is the case of pasta due to bad harvest in summer. Annual trade negotiations have noted an increase in production costs across many items: agricultural raw materials, energy, transport or packaging…”
Already 1.7% in March
This current assignment should result in an average increase of 3 to 4% in foodstuffs that are starting to happen on the shelves. According to the IRI institute, this increase reached an average of 1.7% in food in March compared to the same month last year. In fact, some products experienced remarkable price increases within a year.
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Éditions Dauvers and A3distrib agency increased pasta prices in many stores between the last week of July and the first week of March. We went from just over 70 cents for a kilo of private label pasta shell packages to about € 1.30. The first sunflower oil price in Carrefour changed from € 1.45 in August 2021 to € 1.99 in April 2022!
Lower prices from 2013 to 2019
With the reopening of negotiations, industry watchers are betting there will be further increases in the coming months. Up to 7% or 8% on average compared to January 1st! Biscuit manufacturers are already returning to the negotiating table to demand a 15% to 20% increase.” says Olivier Dauvers.
In the National Association of Agri-food Industries (Ania) or Liaison Institute for Consumer Businesses (Ilec), which brings together 90 national and international big brands, it was announced that only half of the increases demanded during the negotiations were achieved. .
In any case, this trend towards food inflation should hit consumers more because they are no longer used to it. “Food prices have fallen by about 8% since the start of the price war between brands in 2013 and the end of 2021”, Emily Mayer of the IRI institute explains.
A development that consumers are not always aware of. “We observe that when prices drop, people generally opt for higher quality products and therefore end up being a bit more expensive.” Adds Emily Mayer.
High demand for big prizes
For several weeks, distributors observed clear changes in the behavior of their customers. “A lot of people come with slightly fuller cars, but less, says Michel-Édouard Leclerc, chairman of the strategic committee of the group of the same name. Entry-level products, whose sales have decreased in recent years, are again in high demand, and many customers shop by scanning the products on the go in order not to exceed their budget. »
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Thierry Desouches, director of communications at System U, points out that customer interest for promotional items is increasingly strong and sales in the butcher department are declining. “We feel that consumers are increasingly choosing on the shelves”, said.
Michel-Édouard Leclerc, on the other hand, requested the temporary suspension of a provision of the Egalim 1 law, which obliges brands to impose a minimum 10% margin on food products. This measure was requested by FNSEA in order to give fair wages to farmers.
Inflation champion pasta
13.43 %: Average increase in pasta price in March 2022 compared to March 2021, According to the statements of the IRI institute. This was the product that increased the most, ahead of mustard (7.7%), oils (7.3%) and flours (7.1%).
– 4.1%: This, on the other hand, is the average decrease in the prices of washing products. for the dishwasher. Shower gels and facials also fell by about 3% in March.
2008 and 2011: These two years are the last two important periods of food price inflation, according to the IRI institute. In 2008 inflation exceeded 4.5% (compared to 2007) for all consumer products and self-service fresh products, but was 22% for pasta or 20% for rice. Between 2011 and 2012 the increase was “only” 3%.