France flags 'anti-inflation quarter' for food prices

The French government said Monday that it had made a deal with major retailers to cap many food prices, in a bid to make inflationary pressures easier to bear for consumers.

Retail groups would cut prices for a wide range of foodstuffs, the choice being left to their discretion, "to the lowest possible level" until June, Finance Minister Bruno Le Maire said.

This would turn April to June into an "anti-inflation quarter", he told reporters after meeting with retail business leaders.

Retailers had agreed to bear the cost of the initiative, which Le Maire said would amount to "several hundreds of millions of euros (dollars)".

Food inflation was 14.5 percent in February year-on-year, according the national statistics institute INSEE.

Most large food retailers in France participated in the talks, though market leader E.Leclerc stayed away.

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"I'd rather be cheaper across the board," said CEO Michel-Edouard Leclerc. "I didn't wait for a public meeting to lower prices," he told the CNews channel, adding that the agreement could "give the impression that retailers will make up for this by charging more for their other products."

Some consumer associations were also sceptical of the "anti-inflation" initiative, which comes on the eve of another mass protest and strike day against the government's plans to reform France's retirement system.

"Without any fixed rules on prices, a so-called 'cut-price' may actually be just the usual price," Olivier Andrault of the UFC-Que Choisir association told AFP.

But Le Maire said the selected products would have to be marked with an "anti-inflation quarter" logo featuring the colours of the French flag.

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There would be spot checks to make sure that retailers did not squeeze their suppliers to make up for the revenue shortfall, he said.

Le Maire also said the government would start testing a "food cheque" system for low-income families over the coming months.

Source: AFP