France strong-arms food companies into cutting prices

After securing a pledge from 75 food companies to cut prices on hundreds of products, France’s Finance Minister Bruno Le Maire said shoppers in the country should pay less for their food from next month.

The companies, which together make 80 per cent of what the French eat, could face financial sanctions if they don’t follow through, Le Maire said.

The government is furious that supermarket prices have hit record levels in recent months even though the costs of many raw materials used by food producers have been declining.

Improved harvest prospects have helped push the United Nations’ index of world food commodity prices to a two-year low.

The finance minister has previously threatened to claw back what he described as “undue” profits from food companies with special taxes if they did not pass on their own lower costs to consumers already struggling with high energy bills.

“As soon as July, prices of certain products will go down,” Le Maire told BFM TV on Friday, after meeting food industry representatives a day earlier.

“There will be checks and there will be sanctions for those who don’t abide by the rules.”

Le Maire said pasta, poultry and vegetable oil were among products on which prices will be cut. The costs of beef, pork and milk would not be affected by the move, he said.

(With inputs from Reuters)

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