Business

Are the causes of food inflation that Michel-Edouard Leclerc cites correct?

Food price inflation, a consequence of the war in Ukraine † No answer Michel-Edouard Leclerc† Invited by as many as four media outlets on Tuesday and Wednesday, the chairman of the Strategic Committee for the supermarkets of the same name assigned these increases, the logistical disruption related to Covid-19, the “growth recovery” and the “energy crisis”. The businessman also underlined the rise in the cost of certain materials or bird flu, which would lead to a scarcity of eggs.

Michel-Edouard Leclerc, chairman of the strategic committee of the E. Leclerc centers, points to several mechanisms that explain food price inflation.
Michel-Edouard Leclerc, chairman of the strategic committee of the E. Leclerc centers, points to several mechanisms that explain food price inflation. – ROMUALD MEIGNEUX/SIPA

In addition to these international factors, the boss of the Leclerc centers denounces “a catch-up policy desired by the government to better reward agriculture”. In his eyes, a law, called Egalim 2, which aims in particular at better rewarding farmers. “The Egalim 2 law forced us to implement price increases that are now in the shops at the end of February”, did he complete on BFMTV, while manufacturers and distributors have been negotiating prices for a little over a month. An argument that Michel-Edouard Leclerc took place already at the end of March on his blog.

FAKE OFF

Inflation is here, as noted by the boss of hypermarkets: in April, Insee has reported 3.8% increase in one year on food. In detail, the bill even rises by 6.6% on fresh products. But is this the only factor in this waltz of labels? “There is indeed a destructive effect of the Covid: we have a disrupted industry, disrupted transport,” recalls 20 minutes Stéphane Gouin, lecturer in agro-food marketing at the Agro Institute Rennes Angers. Rising energy prices have been a trend for several months now.

What about the law cited by Michel-Edouard Leclerc? Did it contribute to the price increase? Hard to say because there is currently no research on the impact on shelf prices. An observatory is responsible for observing the prices charged between agri-food manufacturers and distributors, such as E. Leclerc. If there has been no communication about the amounts agreed between the two sides at the end of the negotiations that ended on March 1, manufacturers and distributors appear to be on their way to a 3% increase.

However, this should not be taken as an increase of “3% in the prices on the shelves paid by consumers”, the Ministry of Agriculture describes with 20 minutes† “An increase in the price paid to the industrialist for the agricultural raw material does not necessarily mean large increases on the shelf, the ministry continues. The share of the price of agricultural raw material in a product is limited (maximum 20%), the rest is packaging, transport, etc. Distributors, who offer a wide range of products in their stores, sometimes also choose to use the margins on to downsize one product. product while maintaining them on others.

An initial draft of the law, which, however, did not provide for the sanctification of the price of commodities, had not led to “significant inflation” in consumer prices, recalls Céline Bonnet, co-author of a report published in 2020 with an analysis of the impact of this text.