Shoppers face €5bn bill to pay farmers more

Shoppers have been told they could face a €5billion annual bill under government plans to limit supermarket discounts and pay farmers more.

Proposals would set a 10% minimum price difference between stores’ buying and resale prices but consumer group UFC Que Choisir said it could push the average annual shopping bill up by €177 a year.

Making shop prices a minimum of 10% above the producer’s price is aimed to help farmers by preventing supermarkets and food giants from driving down farm-gate prices.

This would severely limit price promotions such as the recent Intermarché 70% discount on Nutella.

Jars were put on sale for €1.41 instead of the usual €4.50 and saw shoppers fighting in the aisles for them, leading the store chain to ban such promotions as it “regretted the image these excesses give of our society”.

Current rules allow supermarkets to buy products and resell them at whatever price they wish, but not below the purchase price – so loss-leaders are not allowed except during the twice-annual soldes.

In addition to the 10% limit, new rules restrict discounts to 34%; meaning three items at 34% off gives one free instead of the old ‘buy one get one free’.

Rules will be tested for two years then the effects evaluated.

UFC-Que Choisir is sceptical after seeing a National Assem­bly impact study. President Alain Bazot said it gave percentage price rises and Que Choisir had put them in money terms. “We understand there could be between 0.7% and 2% inflation on food products, and this would be between €1.74billion and €4.98bn in extra costs for consumers, or up to €177 per household.”

But, he added, the study did not say “by what miracle these extra supermarket margins will drip down to producers”.