In the great game of lying poker between distributors and manufacturers, everyone plays their part and presents a white hand. Invited this Thursday morning on RMC, the president of the Consumer Business Liaison Institute - Ilec -, Richard Panquiault, defended the interests of his members, speaking out against the accusation that they are "profiteers ".
Once the bill on commercial negotiations has passed, manufacturers and distributors will be able to get back around the table to discuss product prices. The exchanges are expected to be vigorous, to say the least, while the former are dealing with certain inputs that are still on the rise, while the latter want to see labels reduced on the shelves. The result of the negotiations should therefore be mixed, warned the boss of Ilec: "Everything is not going to go down, it's impossible", he stressed, while certain costs continue to increase for companies, like “recycled plastic”.
The results will therefore be “contrasted”. Certain products, such as poultry, wheat or vegetable oils, have already seen their prices decrease. Others should follow this example: “These falling prices will be passed on, [but] there are others” whose costs continue to increase, insisted Richard Panquiault.
In the longer term, the agri-food giants must also cope with “more structurally inflationary factors”. The representative of brands like Bic, Bel, Candia, Bonduelle and Heineken cited as an example the consequences of “climatic phenomena”, which lead to price increases via shortages, tsunamis, droughts and disruptions in production chains. Likewise, the ecological transition of companies, for example to develop recyclable packaging, requires significant investments which will weigh on the structures' accounts. So many elements that could push them to increase their prices.
The Ilec representative also criticized the “rigidity” of the French system, in which price increases and decreases are difficult to pass, including, sometimes, because large retailers want to maintain their prices. He also defended manufacturers, whom distributors accuse of being too greedy with their prices. A “bad trial”, according to Richard Panquiault. Over the last five years, the gross operating surplus - EBE - of large companies in the sector stood at 5% in France, "three times less" than at the international level, he argued, highlighting the “low profitability” that these players manage to achieve in France. Enough to jeopardize “the attractiveness of France”. “Margins are low, and they have not improved,” he concluded.
This speech comes as the executive hopes to convince manufacturers and distributors to conclude an agreement on “moderation of margins”, in the words of Emmanuel Macron. “It’s unbearable to see so many of our compatriots who are in this situation, having to choose essential goods for themselves, for their children, for their family. No one should take advantage of this crisis,” said the President of the Republic last week. Since then, distributors have blamed manufacturers, and loudly underline their own fight to lower prices.