Retailers in France have agreed to offer the lowest possible prices on basic food items to help households cope with rising inflation, French Finance Minister Bruno Le Maire said on Monday.
Supermarket chains will take a hit to their profits of several hundred million euros by cutting product prices during a three-month campaign, he said. Affected items will carry a logo with the French flag and the slogan “anti-inflation quarter”.
“This is a strong agreement that will be visible and will protect our citizens,” Le Maire told a news conference. “Fighting inflation is everyone’s job”.
The biggest price jump in a generation is becoming a growing challenge for French President Emmanuel Macron, who is already facing mass protests over his plans to overhaul the pension system.
Although huge sums were spent to contain the initial energy price shock that started in late 2021, the strain on public finances has forced some support to be phased out. Food inflation is even more complicated because the government cannot easily intervene, as in the electricity and natural gas markets.
Last month, ministers touted an “anti-inflation basket” that would act as a harmonized index for consumers to compare prices, but the idea was scrapped after talks with retailers.
Carrefour SA Chief Executive Alexandre Bompard, one of several retail executives who stood alongside Le Maire on Monday, told reporters that the price cuts would be decided by individual chains and would mainly apply to own brands, where has the greatest freedom of action.
“The measures taken by different retailers are different in nature because there is a principle of freedom for retailers to be able to offer the most effective promotions for customers,” he said.
Shares in Carrefour and rival Casino Guichard-Perrachon SA fell more than 1 percent after the announcement in Paris.
In neighboring Spain, despite cutting value added tax on several food products in January, Prime Minister Pedro Sánchez is under pressure to do more as food inflation tops 15%. His junior coalition partner, the far-left Unidas Podemos party, last week demanded a cap on food prices and a 14% discount on 20 basic items.
The entire analysis of Bloomberg TV Bulgaria website
