December 20, 2017 / 11:16 PM / a year ago

France to raise minimum food prices, limit bargain sales

file photo: A farmer harvests wheat in Marquion, near Cambrai, France, July 18, 2017. REUTERS/Pascal Rossignol

PARIS (Reuters) - France will on Thursday announce a plan to raise regulated minimum food prices and limit bargain sales in supermarkets as part of a wider field-to-fork plan aimed at increasing farmers’ income, a government official said.

The measures are part of a wider review promised by President Emmanuel Macron to appease farmers, an important constituency in French politics, who have long complained of being hit by squeezed margins and retail price wars.

In October Macron said the government would raise minimum prices retailers can charge on food products only if each sector proposed detailed organization plans by the end of the year. Most of these plans arrived late last week, the official said.

The government will propose that threshold below which retailers cannot sell food products will rise by some 10 percent while prices on promotional offers could not be discounted by more than 34 percent and no more than 25 percent of a product’s volume could be sold in a promotional offer, the official said, in line with a proposal reported by daily Le Figaro.

The new rules, aimed at limiting sales at losses that pressure suppliers down the chain, would be applied for a trial period of two years.

Macron had delayed until year-end the proposal by retailers to raise regulated minimum prices as he sought guarantees it would meet his promise to boost farm income while minimizing retail inflation.

The measures will be included in a new law, set to be approved in the first half of next year, which will also tackle price renegotiation in case of a wide swing in commodity prices and create a reversed contract starting from farmers’ production costs to food processors and to retailers.

Company and industry representatives, unions, non-governmental organizations and officials, have gathered at the so-called Food Convention since the summer to discuss topics ranging from food quality to farm income and export strategy.

Reporting by Sybille de La Hamaide; Editing by Dominique Vidalon and David Evans

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