Will the anti-inflation basket see the light? Confirmed last week by Bruno Le Maire, this government initiative that wants to present to large retailers a selection of around twenty products that would be sold at cost price is currently in the project phase.
Why don’t the big brands take the lead in launching offers equivalent to this basket? Guest on BFMTV this Wednesday, Michel-Edouard Leclerc explained the blockades facing the sector.
The second stumbling block this time is legislative. Since 2018, the Egalim law on the remuneration of the agricultural sector prevents large retailers from selling with too low margin rates. The objective is that suppliers are less pressured by brands and do not convey their limitations by buying less from farmers.
“An Intellectual Monstrosity”
Except that in times of high inflation, this legislative restriction would have price-raising effects, Michel-Edouard Leclerc believes.
“I remind you that in the Egalim law, I am obliged to take a margin of 10% […] in Evian, in Coca-Cola, in Joker, in Nescafé, in chocolate. Theoretically to help farmers, continues Michel-Edouard Leclerc. But this idea is an intellectual monstrosity […] that the margin that the distributor makes on these products goes to the producer of pork or milk, that is useless”.
A basket that the distributor also considers a bit limited in relation to the real needs of consumers.
“Our fuel tanks were empty”
Also expected on fuel prices, the head of the Leclerc centers believes that the period is not favorable at the moment with the strikes to start commercial operations.
“I must not push the fuel attraction button too much because we are going to upset the supply circuits. Today we do not know if the deposits will be blocked, if the refineries will be blocked”.
However, the dealer, who believes consumer prices should rise sharply this year, sees some glimmers of hope.
“Everything related to food will continue to increase, on the other hand, from June we have in perspective the stationery that will continue to increase but much less, the price of paper has reached its asymptote, he points out, transport is going down, today the price of packaging is going down and finally in China the manufacture of big brand toys is at a more or less stable price, what makes prices move in the end is the dollar/euro variation”.
Source: BFM TV
