New supermarket resale rules could cost shoppers €5bn

Consumer rights association UFC (Union Fédérale des Consommateurs)-Que Choisir found that the government’s plan to impose a resale value of at least 10% above the original price of purchase - ostensibly to benefit agricultural producers - could cost consumers dear, as it also questioned how much it would actually help producers in the first place.

The bill, which seeks to financially benefit agricultural producers, plans to provide more structure and limitations on supermarket promotions, to ring fence the amount of money that producers will receive even if their goods are discounted at point of sale to consumers.

Ultimately, at all times, products would need to be sold to consumers for at least 10% more than their original wholesale purchase price.

This is in contrast to today’s rules, which in theory allow distributors to buy products, and discount them as much as they choose.

The rules were in the headlines recently after the Nutella riots, when some pointed out that under the new 10% law, the 70% discount - which saw 950g pots sold for just €1.41 compared to their usual price of €4.50 - would have been illegal.

“Today, distribution [companies] can buy a product at 100, and sell it at 100. Tomorrow [after the bill] they would have to sell that 100 product back at 110,” explains Nicolas Girod, national secretary of the agricultural worker association, La Confédération Paysanne.

The UFC-Que Choisir group made its analysis of the potential cost to consumers by looking at a 117-page report published last week by the Assemblée Nationale, which had been requested by the government.

“The study does not refer directly to the €5 billion figure,” explains Alain Bazot, president of UFC-Que Choisir. “But it is expressed in percentages. We understand that there could be between 0.7% and 2% of inflation of food products, which could amount to €1.74 billion and €4.98 billion in extra costs for consumers, or up to €177 per household.”

The group also claims that the report still “is not in a position to explain to us by what miracle these extra supermarket margins will drip down to producers”.

It also added that at last count, inflation costs of food had already been climbing significantly higher in France compared to many other Western European countries.