Will food prices increase in France due to Middle East conflict?

As millions in France grapple with the rising cost of fuel and travellers see summer holiday plans thrown into jeopardy, a quieter but just as impactful risk lurks in the background: higher shopping costs due to inflation.

The war in the Middle East has affected several steps in the supply chain, as rising oil prices impact elements from transportation to packaging.

France has maintained some of Europe’s lowest inflation rates for several months. However the fallout of the conflict across the continent means a rise in inflation is all but assured and will only be exacerbated by a prolonged conflict or closure of the Strait of Hormuz.

Consumer associations have already warned that the price of a weekly shop may increase by 5% due to the war.

However, some industry experts say the impact will not be as high as following the outbreak of the war in Ukraine in 2022. 

Conditions not the same as 2022

Higher fuel costs – both jet fuel and petrol/diesel for drivers – are being caused by a direct lack of raw material, in this case crude oil. 

The Strait of Hormuz is used for around 20% of global energy supplies (crude oil and liquefied natural gas) and its closure means prices to obtain the goods from elsewhere have increased.

In comparison, rising food costs are largely caused by more directly related inflation, ie an increase in the cost of raw (food-related) materials / wages. 

For this reason, increases should be limited, at least compared to 2022.

“In 2022, inflation was based on three simultaneous factors: rising raw material costs, rising energy prices, and rising wages,” said retail expert Olivier Dauvers to La Dépêche du Midi. 

“Today, these conditions are not met. There is no inflation in raw materials [except for crude oil] or wages. For example, the price of wheat is currently at the same level as at the beginning of the conflict.” 

Very few goods or ingredients in French items come directly from the Middle East or Iran.

“Therefore, the structural reasons for a potential price increase are not present,” said Mr Dauvers.

However the impact of rising oil prices is likely to affect supply chains.

Oil “plays a role at every stage of the chain: in the production of food products, their transport, but also in packaging, which is partly dependent [on it]. If these costs increase, this can mechanically be passed on to prices on the shelves.”

General inflation across sectors

Energy prices are set to have an inflationary increase across the economy, but a distinction between different types of inflation needs to be made to help understand its lower-than-expected impact.

“Energy, for example, affects all products in the same way. With the war in the Middle East, we should therefore expect general inflation due to the tension surrounding oil,” said Mr Dauvers. 

Energy prices affect most job sectors as well as households through increased energy bills, more expensive fuel, higher holiday costs, etc.

For most companies however, this represents a small percentage of actual costs, and even if this rises significantly, does not have the same impact as inflationary rises across a number of expenses.

This is compared to ‘sectoral’ inflation, which is linked to specific tensions within a single element of a sector’s activity, or in the case of supermarket shelves, sometimes a single product or ingredient.

Last year, prices of products including orange juice, chocolate, and coffee all saw large increases due to impacts on raw good production. 

In 2026 however, prices for some of these goods have begun to fall.

What are supermarkets doing?

“Manufacturers primarily want to pass on the increased costs, particularly those related to energy and packaging,” to supermarkets, Mr Dauvers said.

In turn, supermarket chains pass on price increases “because they want to protect themselves in case the war continues.”

French supermarket chains recently concluded annual negotiations with suppliers to cover prices for the next year, which largely sets prices for the coming months.

Companies can individually renegotiate deals with supermarkets for themselves in the event of unexpected price increases through minor adjustments to costs.

The government can also order negotiations to reopen – as they did in 2022 – in light of serious events. 

However Trade Minister Serge Papin said new negotiations “are an option,” but as of April 27 has not yet put these in place. 

Frank Rosenthal, marketing expert, agrees. “Imagine negotiations are announced to resume tomorrow, leading to price increases, but then peace is reached.”

“We could end up with inflation higher than it should have been,” he said to media outlet RMC.