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France Could Tax Food Industry Over High Prices: Finance Minister

By Reuters
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France Could Tax Food Industry Over High Prices: Finance Minister

The French government could use tax measures to claw back profits from the food industry if it does not accept talks on high prices, finance minister Bruno Le Maire said on Thursday.

With food inflation running at a record 15% in recent months, the government is furious that retail prices remain high despite declines in raw material prices.

Le Maire said that the food industry was reaping big profits and that it must reopen annual negotiations with retailers and lower their prices.

"If ever the food industry does not return to negotiations ... we will use all measures at out disposal, including taxes, to recover profits unfairly made on the back of consumers," Le Maire told journalists ahead of meeting with representatives of big retailers.

Food Price Inflation

French food prices spiked after food companies and retailers agreed to a 10% average increase in prices in annual negotiations in March, which both sides said was necessary to cover higher production costs.

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But with high food prices buoying overall inflation, Le Maire has repeatedly called for negotiations to be reopened to ensure that the global fall in raw materials filters through to consumers.

Under pressure after forcing through an unpopular increase in the retirement age, President Emmanuel Macron's government is eager to be seen tackling citizens' every-day problems, such as surging food prices.

Read More: France's Le Maire Wants To Break Food Price Inflation 'Spiral' By Autumn

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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