French supermarkets to demand food groups cut prices by up to 5%

investing.com:

By Helen Reid

(Reuters) -Supermarket groups in France could demand price cuts of 2% to 5% from food manufacturers in negotiations set to kick off soon, the head of retailer Les Mousquetaires told lawmakers on Wednesday in a roundtable with executives.

French retailers have criticised consumer goods giants like Unilever (LON:ULVR) and Nestle for price hikes they say are unjustified. The government has also put pressure on the consumer goods makers to cut prices.

Lower raw material and energy costs mean producing food and other consumer goods is less expensive, Les Mousquetaires President Thierry Cotillard said, and prices agreed in negotiations should reflect that.

«We should probably be able to demand that the big (consumer goods) groups cut prices by between 2% and 5%,» he said.

Cotillard said the group's business in Portugal had managed to negotiate lower prices with consumer goods firms, because price talks there are not restricted to an annual window. Les Mousquetaires operates in Portugal under the Os Mosqueteiros banner.

«Our request, to be able to negotiate throughout the year like our friends in Portugal and Spain, strikes us as perfectly legitimate,» said Cotillard.

France, which has regulations dictating an annual window for price negotiations — from December 1 to March 1 — is considering a law that would bring forward the negotiations, aiming for talks to begin soon and wrap up by Jan. 15.

«We are asking you, in the relationship we have with consumer goods groups, to trust us and to let us negotiate,» Carrefour (EPA:CARR) CEO Alexandre Bompard told lawmakers.

Lawmakers also questioned Systeme U CEO Dominique Schelcher and E Leclerc co-president Philippe Michaud in the parliamentary committee on economic