Food inflation: why France is a bad student in Europe

Is France the dunce's hat for food inflation in Europe? If she was at the forefront of good students a few months ago, she is now at the bottom of the class, according to an analysis by NielsenIQ for LSA. The panelist analyzed the prices of thousands of consumer products in seven European countries. His observation is clear: “today, France is the country where prices have increased the most since January 2022”. France thus comes out on top with cumulative food inflation of 17.9%, between January 2022 and August 2023. It is followed by Spain, at 17.2%, the United Kingdom at 16.7%, Italy at 16.4%, Germany at 15.5%, Belgium at 14.9% and Portugal at 12.4%.

However, France was among the best placed countries last January, with food inflation set at less than 12% over one year. Only Belgium had managed to contain its inflation below this threshold. Since then, the other countries of Western Europe have considerably reduced their food inflation, like Spain, which was at 15% increase over one year in January and which reached 8.9 % last September. France is now at 9.5% over one year but is ahead of its neighbors, such as Germany, at 7.1%, Italy at 6.7% and Portugal, at 5.7%.

“In France, the price war raged for four to five years, the brands wanted to use low prices, which led to strong deflation,” explains to Le Figaro Daniel Ducrocq, who manages distribution for Europe. West at NielsenIQ. “Between 2017 and 2022, products of the same brand recorded a price drop of 15% on average,” he adds. France is therefore experiencing “catching up”, notably with a surge in prices over the past year and a half, partly because of the war in Ukraine and the rise in raw material prices. “We will not return to the previous price,” Daniel Ducrocq already warns.

For the specialist, another parameter explains France's poor position: "here, inflation appears later because we only carry out one commercial negotiation per year, while other European countries negotiate several times during the year. year." This is why the Minister of the Economy, Bruno Le Maire, announced on August 31 that he wanted to advance these negotiations between supermarkets and manufacturers. As a result, they must conclude on January 15 for companies with a turnover of less than 350 million euros, and on January 31 for others. “We hope that there will be a drop from March,” underlines Daniel Ducrocq.

If the executive is already talking about the end of “the inflationary crisis”, the reality risks being quite different on the shelves. The CEO of Coca-Cola announced this Monday to Le Parisien a 7% increase in gross prices offered to distributors. “Please note, this does not mean that our products will increase by the same amount, since we will negotiate this figure with large retailers. Then, each distributor will be free to make more or less margin on this or that product, before setting the final price,” warns François Gay-Bellile. The French, for their part, helplessly watch the yo-yo of prices and the quarrels of the different actors.