“Anti-inflation quarter”: what should we expect from government announcements to fight against rising food prices?

The subject worries at the highest summit of the State. In February, food products increased by 14.5% compared to the same period of 2022, a level not seen since the 1970s, with headline inflation standing at 6.2%. In full mobilization against the pension reform, which brings together several hundred thousand people every week in the street, the government does not want to see a new front of discontent open up.

This is why the Minister of the Economy, Bruno Le Maire, announced on Monday 6 March the launch of an “anti-inflation quarter”, i.e. “the lowest possible price level” on a selection of “hundreds” of products in large retail chains. A device that will cost “several hundred million euros” to the sector, he said. He also announced the experimentation of a “ food voucher » for the households most in difficulty.

What are these devices? What products do they apply to? Overview.

What is the “anti-inflation quarter”?

The agreement sealed on March 6 between Bruno Le Maire and the representatives of the retail sector provides that the latter undertake to invoice an assortment of products, left to their discretion, at the “lowest possible price” for consumers. The distributors can choose the selection, the number of articles concerned, the level of rebate as well as the duration of the operation. For many of them, the system will begin on March 15.

Some have taken the lead even before the announcements of the Minister of the Economy. From 1^er February, Super U, for example, launched its own anti-inflation offer, i.e. “150 products at cost price”, that is, by sacrificing as much margin as the law allows.

The CEO of Carrefour, Alexandre Bompard, meanwhile presented, on March 5, the system of his brand: 200 products at 2 euros from March 15 and until June. This includes 100 “everyday” products – including baby diapers, spread, flour and even biscuits – as well as 100 so-called “healthy” products, namely yogurts, eggs, fresh vegetables … For Intermarché, this is « 500 anti-inflation products “. For Casino, “500 products at less than 1 euro and at fixed prices”.

If the offers differ from one distributor to another, all must nevertheless display a single and same logo on the selected products: a tricolor sticker mentioning “anti-inflation quarter”. According to the distributors, these commercial operations will mainly concern own-brand products, owned by the brands and not falling within the framework of annual negotiations with manufacturers.

Some distributors, however, believe that they have already done enough by offering products at low prices for several months. “We are hitting with operations at cost price. We are slashing prices on masks, self-tests, baguettes… So Leclerc does not need an anti-inflation basket”, said Michel-Edouard Leclerc on March 6. He did not take part in the meeting between the players in the sector and the Minister of the Economy, which took place the same day.

The abandonment of the “anti-inflation basket”

The “anti-inflation quarter” on which the government and large retailers have agreed differs from the “anti-inflation basket”, for which the Minister Delegate in charge of SMEs, Olivia Grégoire, had first pleaded. This “basket” was to consist of around fifty basic necessities, the prices of which would have been blocked for all the brands. However, this initiative aroused strong opposition from retailers and farmers alike, worried about being victims of a price war.

The consumer association UFC-Que Choisir criticized the government’s choice. “No regulatory definition” does not exist to fix the “lowest possible price”, recalled on France Bleu, on March 6, Olivier Andrault, responsible for the agriculture and food mission of this association.

“I believe in free trade. We cannot block prices administratively,” for his part affirmed Bruno Le Maire. “ We will simply ensure that the commitments made by the distributors will be respected”, he added. In particular, he announced that the services of his ministry would carry out checks in supermarkets.

Reopening of negotiations between large retailers and manufacturers

In return for this “anti-inflation quarter”, the players in the mass distribution obtained from the Ministry of the Economy that trade negotiations with suppliers to the agro-industry, which ended on 1^er March, be relaunched at the end of June.

The last negotiations resulted, in pain, in an average increase of some 10% in the prices paid by supermarkets to manufacturers to take into account the increase in their production costs (energy, transport, raw materials, packaging, etc.). “I will write to all the major manufacturers, those with the strongest backs, to ask them to initiate this renegotiation of prices with distribution”, declared the Minister of the Economy, citing as an argument the decline in the price of wheat or that of the cost of sea freight.

Experimenting with a “food voucher”

Bruno Le Maire also announced the creation of“a food voucher for the most modest”. It was a campaign promise by Emmanuel Macron, already mentioned in December 2020 before the citizens’ convention for the climate.

This device is supposed to allow people in difficulty to have access to quality French food products. He “will be done on a territorial basis, probably the department”he said, assuring that a “experiment will be launched in the next few months”. This device will be part of an envelope of 20 million euros, intended for the local version of the “better eating for all” aid plan.