‘Price war’ between French farmers and big supermarkets continues

FNSEA president Christiane Lambert criticised the "strong pressure" exerted by distributors in the negotiations to obtain lower prices despite the huge turnover made in the last year due to restaurants having to close during the pandemic. [pio3/Shutterstock]

Although annual negotiations between French supermarkets and their suppliers officially ended on Monday (1 March), the “price war” that has once again fuelled tensions this year is far from over. EURACTIV France reports.

After three months of tense discussions, the talks officially ended on a bitter note. Several contracts were not signed before the deadline, and mediators now have a 15-day window to try to resolve the conflicts.

The annual negotiation of purchase prices between supermarkets and the farmers and industrialists who supply food products to them has been a divisive issue since 2008 – the year this exercise was made mandatory.

‘Very tough’ negotiations for many sectors

While poverty remains a major scourge in the agricultural world, France’s national federation of farmers’ unions (FNSEA) and the union of Young Farmers last month denounced the “cascading deflation that has imposed itself on producers in too many sectors.”

According to a joint statement published by the two unions, the health crisis would have significantly increased the price of certain raw materials, “considerably” increasing costs for farmers to feed their animals, which supermarkets have not sufficiently taken into account.

Supermarkets, for their part, have “denied the fact that the price of cereals has a huge impact on the cost of animal feed,” FNSEA president Christiane Lambert, told EURACTIV France in an interview.

Lambert also criticised the “strong pressure” exerted by distributors in the negotiations to obtain lower prices despite the huge turnover made in the last year due to restaurants closing during the pandemic.

According to Lambert, negotiations turned out to be “very tough” for many sectors impacted by the rising price of cereals, including those involved in the production of charcuterie, poultry, eggs, dairy products, and biscuits.

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French food sovereignty under threat

This is not the first time that both sides have been bogged down in a debate about the fair remuneration of producers.

“The price war is still the rule,” said several unions and associations representing the food industry in February. According to them, the “price war” continues year after year, “impoverishes” farmers and food companies alike and poses a “very direct threat to France’s food sovereignty”.

France’s Agriculture Minister Julien Denormandie also expressed concern one month before the end of the negotiations, saying he was worried about the “attitude” of supermarkets, which “pose a risk to the sustainability of our food sovereignty.”

Denormandie recently told weekly magazine La France Agricole that “with the price war, the agri-food chain is heading straight for the wall”.

The distributors, however, have said they want to defend the purchasing power of consumers. “There are more than a third of French people who find it difficult to finish their months without being in deficit”, Jacques Creyssel, general delegate of the Federation of Commerce and Distribution told radio broadcaster France Info last month. “Naturally we must take this into account and ensure there is no massive price increase overall”, he added.

Multi-year agreements – a possible solution?

To break the deadlock, “I recommend that we get out of the annual negotiations,” said Serge Papin, a mediator in the negotiations who was appointed by the agriculture minister at the end of 2020. These negotiations were “always based on power games”, with discussions at the highest level, which ultimately would make agriculture – “the weak link and the adjustment variable” in this process – pay the price, Papin told EURACTIV.

In the context of this year’s “particularly tense” discussions, Papin is thus calling for multi-year agreements and for introducing a “production cost indicator for agricultural raw materials to serve as reference” in the contracts themselves to assist future negotiations.

Such an indicator would better protect farmers from the vagaries of the annual negotiations and would be none other than “the true accomplishment of the EGalim law” – a law that came into force in 2018 to balance trade relations in the agricultural and food sector and healthy, sustainable and accessible food for all. The law also aims to ensure a “fair price” is paid to producers “to enable them to make a decent living from their work”.

All too often this is still not the case, however.

“At Carrefour, there was a promotion this weekend, €8.90 for the prime rib, it’s scandalous”, said Christiane Lambert. “It’s dangerous for the whole sector to make people understand that you can buy a prime rib for less than €10,” she added.

Lambert is hoping that “mediators will be respected” during the 15-day window that was provided to resolve the now on-going conflict.

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[Edited by Frédéric Simon]

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