French food law will not squeeze household budgets: minister

PARIS (Reuters) – France’s agriculture minister sought to reassure households that food shopping bills would not jump dramatically as a rise in minimum food prices aimed at raising farmers’ incomes came into effect on Friday.

FILE PHOTO: Breakfast foods are displayed on shelves in a supermarket in Nice, France, July 18, 2018. REUTERS/Eric Gaillard

The government had postponed introducing the measure in December as France reeled from nationwide unrest and sometimes violent “yellow vest” protests over high living costs and the squeeze felt on household budgets.

Didier Guillaume said prices would increase on only 5 percent of products sold in supermarkets, including the chocolate spread Nutella, Coca-Cola and granola – items retailers often sell at a discount to draw consumers in.

The “field-to-fork” bill was a campaign promise of President Emmanuel Macron to win support among farmers, an important voter constituency in France, who have long complained of being hit by low margins and ending up the victims of retail price wars.

“Households will only end up paying more if their trolley is full of Nutella and Coca-cola. The price of loss-leader goods will increase, while the price of meat, fish, cheese, vegetables will not,” Guillaume told CNews.

The new legislation includes a 10 percent increase in the price floor for food products and curbs promotional offers so that retailers cannot discount products by more than 34 percent of their value.

Guillaume said the average household shopping bill would increase by just 50 cents to 3 euros a month.

Supermarket retailers like Carrefour, Casino and privately-held Leclerc typically made a margin of 30-40 percent on farmers’ products, the minister said, adding: “I ask them to stop doing that.”

Michel-Edouard Leclerc, chief executive of supermarket chain Leclerc, France’s largest food retailer by market share, has branded the food price measures a “scam” and said farmers would not see higher prices.

Separately, Guillaume confirmed that a Polish abattoir had sold nearly 800 kilograms of rotten beef to nine French companies.

Polish authorities acknowledged on Thursday that 2.7 tonnes of suspect beef had been exported across the European Union.

“It’s an awful fraud,” Guillaume said.

The trial of two former managers of French meat-processing firm Spanghero and two Dutch meat traders accused of passing off cheap horse meat as beef in ready-made meals and burgers brought food safety standards into focus in France in January.

Additional reporting by Gus Trompiz; Editing by Janet Lawrence

Source link