French Finance Minister Bruno Le Maire said last week he had secured a pledge from 75 top food companies to cut prices on hundreds of products next month to reflect a fall in raw material costs.
Whereas in most countries, retailers and food producers adjust the price of products frequently, France had set by law a three-month time window where such negotiations can take place. Prices are then blocked for a full year, unless one-to-one deals include review clauses.
Read the full article on the Reuters website
NAM implications:
- Problem: Prices were most often locked into yearly price negotiations…
- …too slow to react when input prices move in one or the other direction.
- Also current restrictions make it difficult to police compliance.
- i.e. such as ‘retailers are not allowed to discount products by more than 34% of their value’
- …’nor to sell more than 25% of a product’s volume in a promotional offer’
- Watch this space…
