Saturday, 15 January, 2022

Food law and purchasing power: When Travert accuses Leclerc of “lying”

Tug-of-war between Michel-Edouard Leclerc and Stéphane Travert. In an interview with L’Opinion, the Minister of Agriculture does not hesitate to castigate the “lie” of the CEO of the distribution brand, encouraging him not to “deceive consumers”. The object of the conflict? The impact that raising the resale below cost (SRP) threshold would have on consumers’ purchasing power. Resulting from the States General of Food, the measure of the bill indeed provides for raising this price below which distributors cannot sell. Objective: to allow better remuneration, at the other end of the chain, for farmers. But at what cost to consumers?

Fiercely opposed to this raising of the resale threshold at a loss, Michel-Edouard Leclerc has drawn in recent weeks a campaign to explain his position. With, among other things, a shocking argument: that of purchasing power. The UFC-Que Choisir had thus advanced in early February an impact of up to 5 billion euros on the purchasing power of consumers in 2 years. A “false” calculation replies Stéphane Travert this Monday in an interview in L’Opinion.

“When Leclerc and the UFC-Que Choisir talk about a 5 billion drain on purchasing power, it is smoke, an absurd calculation that covers all food products and the two years of the ‘experimentation’ pushes the Minister of Agriculture, who insists on the perimeter of the increase in the threshold for resale at a loss limited to only leading products, ie 7% of food products. He mentions an overall price increase of “800 million euros”, if the SRP is raised “for the only end products and if distributors do not rebalance their margins”.

“Mechanical” price increase of 0.7%

So how much is the rating going to be? An impact study of the food bill published at the end of January acknowledges this: “in principle, raising the SRP should automatically lead to an increase in the prices of sales to consumers of a certain number of products.” With a 10% increase in the SRP on a third of promotional food products, the average “mechanical” increase in food prices would be 0.7%. And 2% in the event of an increase in the SRP on all promotional food products, it is specified.

Based on these two figures of 0.7% and 2% and as the turnover of food products sold by supermarkets is 124.4 billion euros, the UFC-Que Choisir gave a range of additional costs for consumers of 1.74 billion to 4.98 billion euros more “over the two years that will last” the experimentation of raising the SRP.

While Michel-Edouard Leclerc said last month on France inter “we are asked to raise the price of all food products”, Stéphane Travert replied in L’Opinion that the increase in the SRP of 10% “will not apply to fact that to products at the head of the rack “, or only 7% of all food products. The two protagonists don’t start from the same perimeter, so they can’t agree. The minister does not deprive himself of a tackle to the distributor: “Michel-Edouard Leclerc has built his strategy on the price war, it is his choice. But that he does his job and that he does not penalize not the consumer by rebalancing their prices and margins. “

Leclerc General Assembly of Food