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French Government Forces Major Food Companies to Cut Prices
Pledge to Cut Prices
French Finance Minister Bruno Le Maire said on Friday that major French food companies, including Unilever, had pledged to cut prices on hundreds of products starting next month and threatened fines if they broke their pledge.
Consumer Goods Price Record
The government is very upset after the prices of goods purchased by consumers in retail stores have reached high levels record in recent months, despite the drop in the prices of many materials prime purchased by companies.
Imposing Fines or Special Taxes
Le Maire has previously threatened to claw back what he called “undue” profits from food companies by imposing special taxes on them if the benefits of lower raw material prices prime they are not passed on to consumers, who already suffer from higher energy bills.
Controls and Sanctions
“The prices of some products will drop by July,” Le Maire told BFM television on Friday, after meeting with food company representatives yesterday.
He added: “There will be controls and sanctions imposed on those who do not respect the rules”, noting that the prices of some products such as pasta, poultry and vegetable oils will be reduced.
Le Maire said if the food companies, which produce 80 percent of the food of France’s 75, don’t keep their promise, they will be revealed to the public and cause them embarrassment.
Expected Reduction in Retail Prices
“As wholesale prices of a number of products go down, (retail) prices are also expected to go down by 2, 3, 5 or even 10 percent,” he said, adding that he will have a product list next week in question.
Annual Inflation Rate
The annual inflation in France fell more than expected in May to 6%, its lowest level in a year, with moderate increases in energy and food prices, but food prices continued to climb 14% last month after an increase record about 16% in March./March.