No “profiteers” in the food sector, declares French finance minister as industry grapples with rising costs
07 Nov 2022 --- A recent study by the French finance ministry has concluded that the agricultural sectors, including food companies and retailers, aren’t taking advantage of inflation to disguise higher margins.
“There were no profiteers of inflation in the food industry,” finance minister Bruno Le Maire commented on the study’s outcome this weekend.
“Neither the farmers, retailers, nor the food industry have taken excessive remuneration in the process,” he underscored.
Impacted by a combination of factors
According to the report, higher food prices result from a combination of factors, including the war in Ukraine, the post-COVID-19 recovery, global warming and drought, bird flu, and labor shortages.
Started by the finance ministry in July, the study tracked the margins on food products from 2019 and found the increase in retail prices is mainly due to the high cost of agricultural raw materials, which has risen far faster than prices passed on to consumers in recent months.
For instance, margin declines were “very significant” for pasta (-15.6%), ground beef (-6%) and chicken cutlets (-6.4%), according to the study, quoted by Les Echos newspaper.
The study concluded that the agricultural sectors aren’t taking advantage of inflation to disguise higher margins.Food prices have overtaken energy as France’s most significant contributor to inflation and are expected to continue pushing the cost of living higher through the end of the year.
After easing to an annual rate of 5.6% in the fall, inflation based on a national measure of consumer prices is expected to accelerate to 6.4% in December, the steepest rate in France since 1985.
“No inflation profiteers”
In the context of the sharp increase in food prices, the Minister of the Economy, Le Maire, said the government had commissioned the General Inspectorate of Finance (IGF) to determine whether or not there were abusive profits.
“The conclusion is clear: no inflation profiteers in the food sector. Neither the farmers nor the distributors nor the agri-food industry has taken excessive remuneration in the process,” he added.
According to the IGF report consulted on Saturday by Agence France-Presse (AFP), “All in all, the rise in food prices is the result of a combination of several factors: war in Ukraine, post-COVID-19 recovery, global warming, animal health crisis and various factors of an economic nature.”
Le Maire also suggested the organization of a “value sharing agreement” for early 2023 within the Renaissance party. Even if he reaffirms in the interview his preference for the “employee dividend.”
The Minister of the Economy suggests associating within this agreement “economists, business leaders, employees and opposition groups to identify new ideas in addition to the work undertaken with the social partners.”
He reiterated his intention that France set up “a global minimum corporate tax of 15% at the start of 2023” if no agreement is reached at the European level by December.
The Netherlands, Italy, Spain and Germany will introduce similar national taxation on the same schedule following a commitment made back in September.
Edited by Elizabeth Green
