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LONDON/PARIS, June 23 (Reuters) – Danone (DANO.PA) and Kellogg (K.N) are among 75 consumer goods companies that French authorities have asked to cut prices, according to a list seen by Reuters that sources say the government is using for the initiative.
Finance Minister Bruno Le Maire said on June 9 he had secured a pledge from some companies to cut prices on hundreds of products, under threat of financial sanctions if they fail to follow through.
The French government is using the list seen by Reuters, produced by a research group, as a reference for the project, according to three sources with knowledge of the matter. France’s economy ministry said it was unable to confirm or deny the list.
Unilever, the maker of Hellmann’s mayonnaise and Knorr soup, told Reuters on June 9 it was one of the companies included in the government’s plan. French media recently identified others, including Coca-Cola (KO.N), Mondelez (MDLZ.O), and Nestle (NESN.S).
But the list includes a broad array of food makers such as French agricultural group Avril, as well as some of the world’s biggest drinks makers including Pernod Ricard (PERP.PA).
Danone and Nestle declined to comment, while Coca-Cola, Mondelez and brewer ABI (ABI.BR) did not respond to a request for comment. Pernod Ricard referred Reuters to its trade body.
[1/2]A sign reading “Low prices for you” is seen on a shopping trolley in a supermarket in Nice, France, March 1, 2023. REUTERS/Eric Gaillard/File Photo
Kellogg (K.N) said in a statement it could not comment on discussions between the government, trade associations and retailers, but that its annual round of negotiations had been completed. It said retail prices for its products were set solely by the retailer.
The move by the French government, if successful, could strong-arm some of the companies that have had price increases of 10% or more in recent months to reopen negotiations on prices with major retailers, and pressure their profit margins.
French officials have for months been furious at supermarket prices touching record highs even as costs of many food producers’ raw materials have been declining.
Makers of everything from ice cream to cleaning products have been raising prices, saying they need to keep up with soaring costs after the Ukraine war made energy and other commodities even more expensive than during the pandemic.
Some consumer goods makers have said recently that costs are starting to ease, leading lawmakers and regulators to accuse companies of keeping prices high unnecessarily.
Investors have in recent months warned that consumer goods companies should start easing price increases as supply chain costs decline, worried that further hikes could hit market share and margin growth.
Reporting by Richa Naidu; Editing by Matt Scuffham and Jan Harvey
Our Standards: The Thomson Reuters Trust Principles.
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