Tensions Escalate as Commercial Negotiations Between Retailers and Food Suppliers Reach a Critical Juncture
Delayed Agreements and Unprecedented Strain
In the midst of annual commercial negotiations between French retailers and their agri-food suppliers, a sense of heightened tension has permeated the industry. The negotiations, which typically take place between early December and March 1st, determine the terms, including purchase prices and shelf space, under which a significant portion of the goods sold by retailers will be acquired for the remainder of the year.
The latest monitoring committee meeting, held under the auspices of the Ministers of Agriculture and Commerce, was described as "as tense as the negotiations themselves" by Dominique Chargé, president of La Coopération Agricole. The Association Nationale des Industries Alimentaires (ANIA), the sector’s main lobby, expressed concern over an unusually prolonged delay in the signing of commercial agreements. ANIA welcomed the intervention of Agriculture Minister Annie Genevard, who is said to have "banged her fist on the table" in response to the retailers’ demands for "unsustainable" price reductions from food manufacturers.
Ministerial Intervention and Industry Concerns
While the Ministry of Commerce declined to comment, Minister Genevard had previously stated a desire to "correct certain relational dysfunctions" with retailers who she accused of exerting "unreasonable pressure on prices." Layla Rahhou, general delegate of the Fédération du Commerce et de la Distribution (FCD), pointed to the "responsibility of the State in the deterioration of relations during the negotiations."
"It is particularly difficult because the morale of businesses is at its lowest, so inevitably it increases tensions," she added, accusing large agri-food companies of delaying signatures until the last minute to "put pressure" on distributors. Rahhou claimed that nearly 90% of contracts with SMEs had been signed, compared to only 40% with large groups.
PactAlim, an organization representing SMEs and intermediate-sized food companies, had raised alarm on Monday over "extremely degraded negotiations" and a doubling of "dereferencing threats" by retailers.
Inflation, Rising Costs, and Competitive Pressures
The Ministry of Commerce acknowledged the heightened tensions, noting that distributors "deplored that industrialists are demanding price increases that they do not believe are correlated with the increases in raw material prices that they have observed." While price increases have moderated in recent months, consumer budgets remain under pressure, leading to fierce competition among supermarkets.
Agri-food companies, on the other hand, are highlighting rising costs related to agricultural raw materials, wages, energy, and packaging. "Retailers look at the price of energy at a specific moment and forget that some supply contracts are concluded for several years," ANIA said. "We played our part last year by lowering prices, but in 2025 we cannot afford deflation."
Calls for Reform and Protection
Agriculture Minister Genevard announced her intention to "adjust" the Égalim law, which aims to ensure better remuneration for farmers by providing a framework for commercial negotiations. She also expressed a desire to "partially protect industrial raw materials."
Chargé identified an "impossibility to enforce the Égalim law" on agricultural raw materials, which stipulates, for example, that if the cost of milk production rises, both the industrialist and the supermarkets must pay more. He alleged that retailers are attempting to circumvent the law by relocating negotiations outside the scope of French law through their European purchasing centers.
Rahhou of the FCD argued that the problem lies in the "detachment" of the French food industry from its European neighbors, which she described as "more competitive."
Retailer Absence and Future Outlook
No retail executives attended Tuesday’s committee meeting, but several have announced a joint press conference at next week’s Salon de l’Agriculture at the invitation of TV host Karine Le Marchand. "Love may be in the meadows, but it’s not in the negotiating rooms," quipped François-Xavier Huard, president of the Fédération Nationale de l’Industrie Laitière, referring to a popular TV show hosted by Le Marchand on M6.
As negotiations enter their final stages, it remains to be seen whether a resolution can be reached that satisfies all parties involved. The outcome will have a significant impact on the pricing and availability of food products for French consumers in the coming year.
