October 2, 2018 / 4:58 PM / 15 days ago

France adopts food bill, retailer says will lead to price rise

PARIS (Reuters) - France’s parliament gave final approval on Tuesday to a “field-to-fork” law aimed at raising farmers’ income, improving food quality and fighting waste, but opponents say it will push up consumer prices and only benefit retailers.

FILE PHOTO: FILE PHOTO: Breakfast foods are displayed on shelves in a supermarket in Nice, France, July 18, 2018. REUTERS/Eric Gaillard/File Photo/File Photo

The bill was a campaign promise of President Emmanuel Macron aimed at appeasing farmers, a large and important constituency in France. Farmers have long complained of being hit by low margins and retail price wars.

One of the main elements of the bill is to regulate minimum prices and limit bargain sales in supermarkets.

The government said it hopes that by increasing retailers’ margins on one side, they will accept to raise the amount they pay to producers on the other.

“It’s a scam!” Michel-Edouard Leclerc, chief executive of supermarket chain Leclerc, France’s largest food retailer by market share, told daily le Parisien last week. “There is no link to the income of farmers.”

Leclerc said the bill, which comes after more than one year of debates and is widely supported by other supermarket chains, will lead to a price increase of between 1 and 10 percent on more than 3,000 items.

Most of these products are non-agricultural and often not produced in France, he said, mentioning Coca-Cola, Nescafe coffee and Nutella hazlenut spread as examples.

Rather than helping farmers producing milk, eggs, meat, fruits and other primary products, Leclerc argued the measures would only bolster the profit margins of major manufacturers and retailers.

The bill allows the government to raise the threshold below which retailers cannot sell food products by 10 percent and to curb promotional offers so retailers cannot discount products by more than 34 percent of their value. That would put a halt to major promotions such as two-for-one discounts.

These measures will be put in place for a trial period of two years with regular follow-ups to assess the impact, the government has said.

Farm unions have welcomed the attempt to limit the price wars but blamed lawmakers for failing to agree on price benchmarks that take into account farmers’ costs in contracts and might serve as a basis for negotiations down the food chain.

Instead of imposing price benchmarks, lawmakers left each sector to decide on its own system, with many sectors unable to reach an agreement on what reference price to take into account.

“This law is missing the main objective: to increase farmers’ income and restore the balance of power in the value distribution. Such a waste!” farm union Confederation Paysanne said in a statement.

Other measures of the field-to-fork bill include a ban on plastic water bottles in school canteens, plastic straws and hot-drink stirrers, animal welfare regulations, and wide environment-friendly practices.

Reporting by Sybille de La Hamaide; Editing by Richard Balmforth

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