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government pins supermarkets abusing ‘logistics penalties’

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Europe 1 with AFP
5:44 p.m., September 29, 2022

The government once again pointed the finger on Thursday at the responsibility of food retail chains, some of them being accused of abusing the “logistics penalties”, which they inflict on their agro-industrial suppliers when they do not deliver. not their products on time.

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Noting that the inflationary context of the costs of energy, transport or raw materials is generating “unprecedented tensions on agrifood companies”, regardless of their size, the government has asked large retailers for a ” moratorium on logistics penalties”. This press release, signed by the Minister of Agriculture Marc Fesneau and the Ministers Delegate for Industry Roland Lescure and Trade, in particular Olivia Grégoire, evokes “reported and observed abuses of several brands of large food retailers”.

The FNSEA denounced an attitude “without faith or law” of certain distributors

At the beginning of September, the powerful agricultural union FNSEA had demanded the opening of an investigation by the Directorate General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF) on logistical penalties, denouncing an attitude “without faith or law ” of certain distributors when they apply these sanctions. The Ministry of Agriculture then estimated that some distributors were diverting the use of these penalties “to restore their financial health (…) on the back of their suppliers”.

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The authorities note that “several administrative injunction procedures under financial penalties have been initiated since February” to ensure that practices comply with the law and have asked the DGCCRF to strengthen their “investigation procedures” on the subject.

Reopened negotiations between distributors and manufacturers

Negotiations between distributors and manufacturers, which take place each year to determine the purchase price of a large part of the products subsequently sold in supermarkets, were reopened after the start of the war in Ukraine to take inflation into account. production and operating costs, which deteriorate the financial health of many companies.

They drag on, each side passing the buck, manufacturers accusing distributors of not taking into account the increase in production costs in their purchase price, distributors accusing manufacturers of not sufficiently justifying price increases requested. The situation is all the more complex as consumers, in times of inflation, are very attentive to the prices of the foodstuffs they put in their carts and turn to the stores where they think they will find the best deals.

Source: Europe1

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