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France delays food price rise for farmers after protests

by Reuters
Wednesday, 5 December 2018 17:51 GMT

* France had planned to raise price floor, curb bargains

* Measures aimed at increasing farmers' income

* Farmers' group urges protests after delay

* Street protests over living costs rock France (Adds protests, retailers, government comment)

By Sybille de La Hamaide and Jean-Baptiste Vey

PARIS, Dec 5 (Reuters) - France, reeling from violent protests over the cost of living, said on Wednesday it will delay a planned rise in minimum food prices, incurring the wrath of the main farmers group which urged street action next week.

A powerful constituency in French politics, farmers have long complained of being hit by a price war between retailers, which has benefited consumers but hurt producers.

A "field-to-fork" law adopted early last month sought to ease the burden. One of the key measures, a 10-percent increase in the price floor for food products, was initially due to be adopted at a cabinet meeting on Wednesday.

But Agriculture Minister Didier Guillaume said mass demonstrations led by the so-called "yellow vest" movement, convulsing the country since Nov. 17, had forced the government to postpone the decision.

"This was postponed because of other issues," Guillaume told CNews TV, referring to the widespread protests over fuel taxes which have dominated the government's agenda.

The minister said the decision would be implemented by the government in January or February, before the end of annual price negotiations with supermarkets that started last month.

The government's spokesman later said the measures would be presented again "in the next weeks", with one government source citing the date of Dec. 19.

It remained unclear when the measures could be implemented.


France's largest farm union FNSEA had warned farmers would see a delay in the adoption of the measures as a "disastrous signal". The union on Wednesday called for protests all next week to denounce the delay as well as excessive taxes and what they call increasing hostility towards farmers.

"We are not joining the movement of yellow vests, we will express the difficulties specific to the agricultural sector," an FNSEA spokeswoman told Reuters.

French retailers federation FCD, which includes big names like Carrefour and Casino, also urged the government to adopt the measures as fast as possible because they needed time to adapt, stressing the need to implement them before the close of negotiations with suppliers.

The "yellow vest" protests began last month with the aim of highlighting the squeeze on household spending from increased taxes on fuel, but have tapped into growing discontent over President Emmanuel Macron's leadership.

Selling at a loss is forbidden in France. It has set a level, called "resale at a loss threshold", below which retailers are not allowed to sell a product.

The government intends to raise that floor by 10 percent and limit discounts to 34 percent of a product's price and to 25 percent of available volumes.

Analysts say the measures, to be applied for a two-year trial period, would reduce aggressive price competition among French retailers and accelerate food inflation. However, many retailers said the final impact on consumers' total spending would be minimal. (Reporting by Sybille de La Hamaide, additional reporting by Pascale Denis, Bate Felix and Dominique Vidalon Editing by Sudip Kar-Gupta, Richard Balmforth and Andrew Cawthorne)

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