France agrees with supermarkets to limit the price of basic products: what does it consist of?  Can Spain do it?

France has announced on Monday the creation of a new measure so that citizens can deal with inflation. Thus, the executive led by Emmanuel Macron has reached an agreement with the distribution groups and supermarkets with the aim of limiting the prices of basic foods. Because of this, supermarkets will be able to offer a basket of basic products that will be priced “as low as possible”.

What products does it include?

In order to make this basket of basic products, the different supermarkets must be taken into account. According to the French economy minister, Bruno Le Maire, there will be no list of common products. There will be no limit to the number of products, there will be no maximum or minimum, but each individual chain will be in charge of deciding what and how many products they want to include in their offer.

Likewise, all the products that are ‘fitted’ within this special measure will have to go marked with a logo with the colors of the French flag and a label with the message ‘anti-inflation quarter’.

Why is it possible in France?

In order to carry out this measure, the government will focus on the reduced profit margins when distributing these products. However, it will not affect farmers or different industries.

This reduction in distribution margins will mean that this ‘basket’ has a “lowest possible” costand will suppose, in the global computation of the quarter, a total cost of “several hundred million euros”, as confirmed by the head of the French economy together with those responsible for the different companies involved.

To carry it out, the Ministry of Economy will publish the profit margin figures that have distributors, farmers and producers, data that is disclosed each quarter, guaranteeing greater transparency.

Couple shopping in a supermarket

about a possible VAT reduction in food or basic products, Le Maire has affirmed that it is not carried out since “it is an easy solution, but it costs a lot to public finances and does not contribute anything to the consumer”.

When is it going to start?

Despite the fact that the agreement was announced on Monday, the French economy minister has confirmed that for the next few days The pertinent measures will be carried out to be able to implement this ‘plan’ as soon as possible, although the exact date has not been confirmed. However, and in accordance with the provisions of the Minister of Economy, everything suggests that this measure it won’t take long.

Along the same lines, the Carrefour company has anticipated the Government itself. The supermarket chain announced an operation of the same nature last Sunday. His ‘plan’ consists of offering the customers of his 5,945 stores in France a cap on the prices of 200 commodities that they will have a price limit of two euros.

This will include a hundred food products considered ‘healthy’, including some such as yoghurts, eggs, fruits or fresh vegetables. It will also include hygiene products, such as diapers or detergent, according to Alexandre Bompard, CEO of the French company. Despite both announcements, in neither case has it been estimated an exact date in which this measure will begin.

The basic basket in Spain

A similar initiative was already carried out last year by Carrefour in Spain, although with some differences.

Irish economist Philip Lane, in a file photo during a lecture series.

It was in September 2022 when the chain announced a basic shopping basket with 30 products for 30 euros to “offer savings solutions that protect the purchasing power of families in Spain” to combat inflation.

Dissent between Planas and Yolanda Díaz

With some precedents such as Carrefour or Yolanda Díaz’s insistence on capping prices, the measure taken in France has caused differences between government partners.

In the case of the second vice president and Minister of Labor, Yolanda Díaz, “has celebrated” this measure. The reason for her reaction is because she herself proposed a very similar measure in September of last year. Due to this proposal, the leader of Unidas Podemos received a great deal of criticism, including from the PSOE, her government partner.

“It’s not just possible. I already proved that it is completely legal. It is possible to offer a basket of products, I said 20, but whatever, for a limited price. Article 13 of the retail trade law”, he commented, concluding that it is a measure “essential” so that “people can live a little happier.”

The Deputy Secretary of Economy of the Popular Party, Juan Bravo.

For his part, Luis Planas, Minister of Agriculture, Fisheries and Food, has called “positive” the initiative of the French government, and has ensured that the Spanish distribution sector is “mature and competitive”, and “is in a position to carry out similar initiatives.”

However, Planas has been more cautious than Díaz regarding this measure and does not consider direct intervention in this matter. For the Minister of Agriculture, Fisheries and Food, it is the area of ​​distribution that should take similar actions to those of France “always with respect to the Law of the Chain” and in accordance with the framework of “free competition”.

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Deborah Acker

I write epic fantasy; self-published via KDP. Devoted dog mom to my 10 yr old GSD, Shadow! DM not a priority; slow response at best #amwriting #author.

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