French supermarkets have concluded their annual negotiations with food industry suppliers, resulting in a “quasi-stability” of purchase prices for 2025. This outcome follows a period of significant inflation in recent years.
The Federation of Commerce and Distribution (FCD), representing major French retailers, announced that agreements have been signed with most suppliers, with only a few exceptions remaining.
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Negotiations conclude amid tensions
Layla Rahhou, General Delegate of the FCD, stated that the negotiations have concluded, with most agreements finalized.
She noted that while contracts with small and medium-sized enterprises were signed well in advance, larger multinational companies delayed until the final days of negotiations.
Rahhou also mentioned that some suppliers expressed concerns over the negotiation process, leading to government intervention to ensure compliance with existing laws.
Impact on consumer prices
The purchase price paid by retailers influences the final price consumers see on store shelves. However, retailers set consumer prices independently, based on various factors including desired profit margins.
On average, the purchase price accounts for approximately 72% of the final retail price.
For example, for a product priced at €2.50, the retailer’s purchase cost would be around €1.80, with the remaining €0.70 covering expenses such as staffing, logistics, rent, and energy, resulting in a modest profit margin.
Calls for greater transparency in agricultural pricing
The Egalim laws, designed to protect farmers’ incomes during negotiations between retailers and suppliers, have been a focal point of discussion.
While the laws aim to ensure fair compensation for agricultural producers, retailers have called for increased transparency regarding the cost of raw agricultural materials.
Some suppliers have accused retailers of circumventing these laws by conducting negotiations from abroad, a practice retailers defend as a strategy to strengthen their position against large multinational suppliers.
The French government is planning to review the Egalim laws, with discussions expected to take place before or shortly after the summer.
Proposed changes include enhancing transparency in agricultural pricing and reinforcing compliance measures to ensure fair practices throughout the supply chain.
