Trade negotiations between industrialists and distributors to set the tariff of the national brands ended Tuesday, March 1st.
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How much will increase the prices of Danone yogurt or lesier oil? Consumers will not delay know by shopping. The only certainty, the brand food products will undergo inflation in 2022. It is the result of trade negotiations between industrialists and distributors to set the tariff of national brands, which have completed Tuesday 1 er March .
“Muscular discussions”, “extremely tense negotiations”: while the fateful date approached, the government suggested in recent days the hardness of trade. Anxious to enforce Egalim 2 law, promulgated in October 2021 and supposed to distribute the value in the food chain more equitably to better pay farmers, it has maintained the pressure. And did not transfer the temptation to delay the calendar, even if the contract signature was labeled with respect to 2021.
The last tractings took place at the Fair of Agriculture, in Paris, on the background of outbreaks of raw materials, aggravated by the war in Ukraine. Discussions with large groups have been the hardest. “We have not signed only with Lidl and our will is to find agreements here tonight,” said Jean-Marc Bernier, General Manager of Lactalis France, Tuesday morning. It was costing price increases between 8% and 10%.
Compensate for non-food
According to the government, some negotiations finally completed Wednesday at 8 o’clock. On date, the contracting rate of contracts exceeds 80% in most brands, with one or two exceptions. In the most conflicting cases, the mediator is seized and about sixty mediations are in progress. Although it will be necessary to wait at the end of March to have a clear picture of the results, trends are already emerging.
First of all, food prices are, overall, up, while those of hygiene, beauty and maintenance products are, in deflation or stable. A direct consequence of Law Egalim 2, which sanctates the agricultural share in food products. The brands are trying to limit the inflation of the consumer’s shopping basket by catching up on non-food.
However, food manufacturers, even if they have gone to increases, are dissatisfied. “As companies asked between 6% and 7% increase, they obtained between 3% and 4%,” says Jean-Philippe André, President of the National Association of Food Industries. If the outbreak of agricultural raw materials was not negotiable, those of energy, transport and packaging have had more difficulty being passed on.
“Law of a rare complexity”
“The negotiations that end up will translate into a significant increase in prices in 2022, between 3% and 4%, compared to 0% in 2021. This is an unprecedented rise for almost ten years, which will require priority food products, “recognizes the Federation of Commerce and Distribution. Before adding that “the discussions were made very difficult by the rise in many commodities, by the introduction of a new law of a rare complexity and by the refusal of certain major industrialists of any discussion in order to preserve their Historically high margins “.
remains to know the real impact of these negotiations on farmers’ remuneration. Vegetable producers of the Cooperative Eureden, owner of the Aucy brand, already know that this year, the paid and contractual price has been revalued by 5% to 15% depending on the vegetable. A progression passed down in the tariff negotiated by the manufacturer with the brands.
The dairy farmers are waiting for them the verdict. “If you get half the rise you have requested, it can also be said that it is half of the rise in agricultural raw materials,” says Mr Bernier. Not sure that reasoning is in favor of the farmer.