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France puts up food and drink prices under new law

February 4, 2019

 

Nutella, Président Camembert, Ricard Pastis and Carte Noire coffee are among the brands set to cost more in France as a law on food prices takes effect.

 

It means big food and drink brands can no longer be sold at cost price. Shops' profit margin must be at least 10%.

 

But many shops' own-brand products are expected to get a bit cheaper. Such goods often come from smaller firms.

 

The government aims to help smaller producers but France has continuing yellow-vest protests over prices.

 

There are doubts about whether the new law will actually work as hoped.

How much of a price rise?

 

The 10% margin threshold means a food or drink brand previously sold for €1 (£0.88; $1.1) now has to be priced at €1.1 minimum.

 

But there will not be uniform price increases, French media report. The law affects supermarkets and hypermarkets more than small local shops.

 

That is because the big outlets offer some popular brands at or near cost price, slashing their margins on those products, in order to lure customers, in a fierce price war. Their profits depend on big volume and high turnover.

 

Small shops, however, cannot match the supermarkets' low margins.

Supermarket chain Carrefour is adapting to the law by increasing discounts for loyalty card customers.

 

Carrefour expects to raise prices by 35 euro cents on average, which is 5%. It says 1,000 food and drink brands are affected, out of 25,000 on sale.

 

A big retailer which has already raised prices gave the daily Le Parisien a list of brands affected, while requesting anonymity. Among the price rises are:

 

Président Camembert (up 8.6%)

 

Ricard Pastis (aniseed liqueur - up 9.9%)


Nutella (up 8.4%)

 

Carte Noire coffee (up 4.4%)

 

Coca-Cola (up 5%)

 

Hypermarket chain E Leclerc said it was raising prices by 3% on 1,000 brands.

Agriculture Minister Didier Guillaume said "the aim is to sell agricultural goods for what they're worth". He stressed that meat and fish prices would be unaffected.

 

He said that in supermarkets, in general, prices would go up on 500 out of 13,000 products, and in hypermarkets on 800 out of 20,000 on sale.

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