An anti-inflation basket, a “false good idea”?

• To remedy the rise in prices, the Ministry of Commerce is considering introducing an anti-inflation basket.

  Objective: to block at almost cost price around twenty products per supermarket chain.

• In the overseas departments, a quality price shield (BQP), more or less similar to the basket presented by the Ministry of Commerce, has allowed a reduction in the price of basic necessities.

• Point which gets stuck, this device will not be governed by a legal or regulatory framework, but rather directly by the distributors of the large distribution.

  With which the proposal goes badly.

  .

+30% on the price of meat, +20% on pasta or oil, +16% on eggs… How to relieve the budget of the French, undermined by a price increase of more than 6% over one year?

For the government, an answer to this problem seems to take the form of an “anti-inflation basket”.

“One of the possibilities [to cushion the price increase] is to have a basket […] of around twenty products, which the large retailers would undertake to sell almost at cost price”, indicated Sunday the entourage of the Minister Delegate for Trade Olivia Grégoire at

.

An announcement received with caution by professionals in the sector.

In the overseas departments, a more or less similar device has existed for about ten years: the quality price shield (BQP), which blocks the price of certain basic necessities.

Have a wide variety of products at bargain prices

For the moment, the supermarket chains each offer their own system so as not to pass on (too much) the rise in prices to households.

"Since this summer, we have launched the ''anti-inflation challenge'', with tight prices and price freezes for certain products of our brands", confided this Monday at

a representative of the Carrefour group.

It is clear that, so far, households remain heavily penalized by soaring prices.

“The idea is to have a base of basic necessities whose prices are as low as possible”, explained the Ministry of Commerce.

this Sunday at AFP.

“It goes from baby hygiene to adult hygiene, dairy products, fresh products, pasta…”, lists the entourage of the Minister Delegate for Trade, Olivia Grégoire.

This basket is strongly inspired by Greek anti-inflationary policies.

In the space of a few weeks, the Greek prices of the selected products fell by 25%.

📈 [#Inflation]

This morning the latest inflation figures were published.

To understand how INSEE measures it, find our list of videos on

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— Insee (@InseeFr) January 13, 2023

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And the rules of competition?

In the overseas departments, a similar system has existed since 2012: the Quality/Price Shield (BQP), resulting from the “Lurel” law.

This price control had been introduced after many social movements against the high cost of living, driven in the West Indies by the LKP of Elie Domota.

"Most of the food products sold in these territories come from metropolitan France", explains to

Pascal Perri, economist and columnist on LCI.

“With transport, sea dues [a tax on imports into the Drom-Com] and inflation, prices were 15 to 30% higher than those in mainland France,” he continues.

This tariff shield on consumer products, whose prices are controlled by the authorities, still exists to this day.

“This device has enabled low-income families to have products at cost price,” insists the economist.

However, if a version close to the BQP was originally envisaged by the government, this anti-inflation basket will be based more on “voluntary commitments by distributors” than on legislative or regulatory provisions.

A political choice, probably stemming from the Macronist doctrine of asking rather than imposing.

Moreover, according to Pascal Perri, such an unregulated device would go against the rules of competition: “An anti-inflation basket could create abuses of a dominant position.

If the supermarket chains put only their own brands in these baskets, that amounts to driving out competitors.

»

A mixed reception from large retailers

If it sees the light of day, this device will apply to “about twenty of the 20,000 to 30,000 references existing in stores”, which should not penalize excessively the margins of distributors, underlines the ministry.

An announcement that worries the brands of the large distribution.

As Michel-Édouard Leclerc confided to our colleagues from Le

, with this device coupled with the bill of Rennaissance deputy Frédéric Descrozaille on negotiations between distributors and suppliers, the major brands "[will] not be able to do everything".

“The prices of our suppliers will increase by an average of 15% in March.

With this law, we lose the advantage of big promotions and the 10% margin is maintained.

No distributor can commit to adding to this a basket of products sold at low prices,” explained the leader on a daily basis.

According to Pascal Perri, because of the terms of its use, this future tariff shield "would only lower the price of basic necessities by a few cents".

Which would be “possibly a false good idea.

»

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• Company

• Inflation

• Economy

• Retail

• Olivia Gregoire

• Overseas