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With farmers watching, France sets food price rise plan

by Reuters
Wednesday, 12 December 2018 16:26 GMT

A farmer harvests a sugar beet field in Tilloy-lez-Cambrai, France, September 17, 2018. REUTERS/Pascal Rossignol/File Photo

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Food prices are a major element of a wide 'field-to-fork' review promised by President Emmanuel Macron to appease farmers

PARIS, Dec 12 (Reuters) - Weighing up pressure from both France's powerful farmers and violent "yellow vest" protests, the government on Wednesday put forward a schedule for next year's postponed rise in minimum food prices and curbs on bargain sales.

Food prices are a major element of a wide "field-to-fork" review promised by President Emmanuel Macron to appease farmers, a large and active constituency in France, who have long complained about low margins and retail wars.

In a proposal at the Council of Ministers, Economy Minister Bruno Le Maire said the minimum floor below which retailers cannot sell food products would be raised by 10 percent from Feb. 1.

This was in time for yearly price negotiations between retailers and suppliers between November and end-February.

The government also aims to curb promotional offers on food, including those under negotiation since Dec. 1, 2018, according to the council meeting minutes.

From Jan. 1 next year, discounts on food products will be limited to 34 percent of a product's price. That halts major promotions such as two-for-one.

In addition, from March 1, the overall volume of promotions will be limited to 25 percent of sales of planned purchases between supplier and distributor.

The measures will be trialled for two years with regular follow-ups to assess the impact, the government said.

Street protests over the cost of living have convulsed France in recent weeks, causing violence in Paris and threatening President Emmanuel Macron's authority.

Analysts say the price measures would reduce aggressive competition among retailers and accelerate food inflation. However, many retailers said the final impact on consumers' total spending would be minimal.

France's largest farm union FNSEA had said the delay in food price measures was a "disastrous signal" for farmers and called protests this week against that and what they call excessive taxes and increasing hostility towards them.

There was no immediate reaction from FNSEA to Wednesday's news.

French food industry lobby Ania welcomed the government decision, urging quick implementation to ease the yearly price talks between retailers and suppliers. (Reporting by Sybille de La Hamaide; Editing by Andrew Cawthorne)

Our Standards: The Thomson Reuters Trust Principles.

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