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France Limits Supermarket Price Wars After Nutella Riots

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  • Prices paid to farmers to be based on production costs
  • Stores to face further limits on selling at loss, promotions

President Emmanuel Macron’s government Wednesday presented measures to rein in supermarket price wars in an attempt to strike a balance between farmers who claim they’re underpaid for their produce and consumers who are concerned with their purchasing power.

The so-called “law for a balanced commercial relationship in the agricultural and food sector, and for healthy and sustainable food” tightens up rules against stores selling at a loss and bases prices paid to farmers on their production costs.

“We will preserve our capability to produce while ensuring a fair price to our farmers,” Agriculture Minister Stephane Travert said after the measures were approved at Wednesday’s cabinet meeting. “This law will revolutionize and reverse the relationship between farmers and large retailers.”

Farmers will be encouraged to set up sellers groups that will establish minimum prices, and contracts will be renegotiated if production costs change. “Agriculture is the only industry I know where the producers don’t state their prices,” Travert said. The law also limits special offers that retailers can offer on fresh food products.

About a third of French farmers make less than 350 euros a month ($430), according to the main health insurer for the sector, while their average income is just 15,000 euros a year. At the same time, the tight finances of many French families was underscored last week by scenes of total disorder and even fights when crowds descended on Intermarche stores after it discounted Nutella, a Ferrero SpA chocolate-hazelnut spread, by 70 percent.

“I met with the head of Intermarche yesterday, and I said this couldn’t happen again,” Finance Minister Bruno Le Maire said on RTL Radio. Selling at a loss is illegal in France outside of certain sales periods. Le Maire said the government’s plans to cut payroll tax cuts and encourage greater profit-sharing at companies would lift purchasing power.

Among the other measures approved Wednesday were stricter standards for treatment of farm animals, a larger share of organic food in school canteens, and requirements that agro-industrial companies and canteens donate unused food.

The measures will go to parliament in late February or early March, Travert said.

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