Big food manufacturers in France have pledged to lower prices on hundreds of products next month after pressure from the government.
The French finance minister, Bruno Le Maire, said he had reached a deal with 75 manufacturers after signs that the prices being paid by the industry for raw materials had been falling.
Le Maire has threatened financial sanctions if the companies break the promise to bring down prices for consumers on products where wholesale costs have fallen, Reuters reported. Prices on the list of products, which will be published next week, would be cut by between 2% and 10%, he said.
“As soon as July, prices of certain products will go down,” Le Maire told France’s BFM TV on Friday after meeting representatives of the food industry the previous day.
“There will be checks and there we will be sanctions for those who don’t abide by the rules,” he added, mentioning pasta, poultry and oil as some of the products on which prices will be cut.
High food price inflation has been seen across Europe after energy prices, wages and commodity costs soared after the Covid pandemic and Russia’s invasion of Ukraine.
Concerns about “greedflation” by manufacturers and supermarkets – keeping prices artificially high despite a falls in costs such as shipping, fuel and some food commodities such as wheat – have prompted a competition watchdog investigation in the UK and action elsewhere.
Last month, the chancellor, Jeremy Hunt, met UK food manufacturers to urge them to curb price rises amid grocery inflation of 17%, according to the latest government data, but no formal price controls have been introduced.
Rishi Sunak also called a recent summit of farmers, food producers and some of Britain’s largest supermarkets in the first meeting of its kind to discuss food security in the UK but attenders said inflation was not on the agenda.
In Hungary, the country’s prime minister, Viktor Orbán, imposed mandatory price cuts on some basic food items, while France previously agreed an “anti-inflation quarter” with the large supermarkets chains to keep a cap on the price of essentials. The deal expires next week but the French government has said it plans to extend the measure throughout the summer.
While annual inflation in France eased more than expected in May to 6%, its lowest level in a year, food prices were still up 14% last month after a record increase of almost 16% in March.
Profits have soared in the country’s food industry in the first quarter of 2023, up 15% on the previous three months, according to data from the Insee statistics agency.
