Food prices in France to increase 4-5% due to war in Middle East, says consumer association

The price of food in supermarkets may rise by 4% - 5% in France over the coming months due to inflation linked to the conflict in the Middle East, a leading consumer watchdog is warning.

The rise will affect all products, from fresh foods to shelf-stable goods, and even non-perishable items such as beauty and hygiene products, said head of UFC-Que Choisir’s consumer observatory Grégory Caret to RMC.

The increase will come across a period of several months, rising slowly as the pressures of the conflict impact supply chains, meaning shoppers may not immediately notice the increases.

Prices will rise despite supermarkets and suppliers agreeing to fixed prices in March as part of annual negotiations.

“There are still mandatory revision clauses,” in these contracts, Mr Caret said, and “negotiations must be reopened and this must be reflected in prices,” if long-term impacts are felt. 

What is cause of increase? 

The root cause of the price rises is, as with several other tensions in France at the moment, due to the conflict in the Middle East between the US,Israel and Iran. 

While only a slim minority of goods on French shelves are from the area, shipment and logistics companies that transport items across the country are feeling the impact of rising fuel costs. 

More expensive transportation for items naturally leads to price increases for goods on the shelves. 

“Products with the fastest turnover, that is to say, those with short expiration dates: dairy products, fresh produce, yogurts,” are already seeing price rises due to new shipments facing increased costs, Mr Caret said. 

French dairy giant Lactalis already announced last week that it would increase prices due to the conflict. 

Longer-term, this will spread to other food items.

Alongside transportation, the cost of packaging – particularly from items using plastic for goods – will increase if the raw crude oil needed remains expensive.

Currently, crude oil remains above $90 per barrel due to global instability, well above pre-war levels, and if the Strait of Hormuz remains closed, may rise once more. 

Around one-fifth of global oil supplies come through the Strait of Hormuz, and the strain on supply from its continued closure – and the long-term effects of damaged infrastructure in the area – may see oil prices remain at inflated levels for months if not years.

In terms of non-perishable goods, "everything related to hygiene and beauty [will be affected] because there are many hydrocarbons in these products, in the packaging, and even in the manufacturing process itself,” Mr Caret said. 

Limited impact? 

However, Mr Caret was quick to assure that inflationary increases should be more limited than recent spikes, such as the Covid-19 pandemic and War in Ukraine. 

The latter saw supermarket prices increase by up to 25%, as European oil and gas networks were temporarily strangled. 

However, with drivers continuing to be impacted by rising fuel costs and energy prices for millions of households set to increase, consumers may feel like their funds are having to stretch further than ever.