Coca-Cola, Nutella, Ricard or even President Camembert… So many products that should cost more to consumers from this Friday 1is February. Why? Because the 10% increase in the resale at a loss threshold applies from that date. Stemming from the General Food Report and the Food Law that resulted from it, this measure is part of other mechanisms with a simple objective: better remunerating producers at the end of the chain. Criticized by some, defended by others, the measure stirs controversies over what the impact will be.
First of all, it should be noted that not all products will see their prices increase. Raising the threshold for resale at a loss by 10% means that if the distributor buys a product at 2 euros, he will no longer be able to sell it to the consumer for less than 2.20 euros. Only products sold so far at low margins (less than 10%) will therefore be affected and these are generally the well-known national brand products such as Coca-Cola or Nutella. “These are consumer products that are advertised on television, the products that are most desirable”, specifies Olivier Mevel, teacher-researcher at the University of Western Brittany, specialist in the food industry. “In a hypermarket, there are around 60,000 items, including 3,000 items from very important major brands and as the Food Law only concerns food products, we can estimate that 1,500 items will be affected.” “500 products out of 13,000” in supermarkets and “800 products out of 20,000” in hypermarkets should increase, estimated for his part the Minister of Agriculture, Didier Guillaume, Wednesday, after the Parisian revealed that 24 products will increase 6.3% on Friday.
Declines in private labels
And the 10% increase in the SRP does not mean that all affected products will increase by 10%. Because not all products are sold with a zero margin on the one hand. And secondly, nothing says that distributors, in the midst of trade negotiations, will buy these products from manufacturers at the same price as last year … “If a distributor succeeds during commercial negotiations in having a product at 1, 90 euros when he paid 2 euros last year, he could sell it at 2.09 euros whereas he should have sold it 2.20 euros if the purchase price had not changed “, describes Olivier Mevel . A way to mitigate the impact of the measure.
Another response announced by Leclerc and Intermarché: the fall in prices… on their own brands: private labels. “Our private label is the Repère brand. We are going to reduce the prices of 4,000 Repère brand items (…) We have to drop a lot to compensate consumers for the increase in these flagship products”, Michel said. Edouard Leclerc Thursday on franceinfo. For a family spending 400 euros per month on food expenses, raising the SRP could ultimately have very diverse effects. If she is very attached to national brands, her wallet will take a cost and she could have to pay 20 to 40 euros more on her basket, estimates Olivier Mevel. Conversely, if it is a follower of the private labels of the two brands having announced cuts, it could on the contrary see a gain in purchasing power of the order of 20 euros.
Concern for SMEs
What push consumers towards private labels? “If the gap between big brands and private labels grows and if at the same time, distributors raise their first prices and therefore the gap between premium private labels and lower prices is reduced, this can benefit private labels. premium “notes Olivier Mevel. All the more so as another element works against national brands: the supervision of promotions on food products, now limited to 34% of the value and 25% of the annual volume. No more “1 bought, 1 free”. With the cumulative application of these two measures, private labels could well fare well even though they have tended to lose market share in recent years.
But raising the SRP could also have an indirect impact on French SMEs. “If the price war is moving towards private labels, it is bad news for jobs”, indicates Olivier Mevel who recalls that private labels are manufactured by agricultural cooperatives and SMEs. The FEEF, which brings together independent or family businesses, suppliers of large-scale commerce, also fears that SMEs will be penalized by this measure. She is worried that “the implementation of an increased SRP will translate into a preference of distributors for high volume shelves. […] and therefore the big brands of multinationals “and that” French SME brands will see their attractiveness diminish. “
And the producers for whom the measure was put in place in all this? On the side of the FNSEA, optimism is in order and the specter of purchasing power agitated by some annoys. “The SRP is part of a device whose objective is to better distribute value, not to increase prices; to better remunerate farmers, not to bludgeon consumers”, indicates the union, recalling that “the effect is not guaranteed if the distributor does not play the game of EGAlim law to get out of the price war. ” In recent weeks, agreements between the giants of mass distribution and dairy giants have multiplied and have been extremely highlighted. Olivier Mevel says he is “very dubious about the consequences of the application of the law”. This is based on a principle of run-off – without a binding mechanism – while the teacher-researcher points out that “a margin cannot be shared”. “What I’m asking supermarkets is to find a way to distribute margins differently, to distribute things better, the objective is that agricultural products are sold at their fair value,” asked Didier Guillaume on Wednesday. It remains to be seen whether his request will be heard.