Author: ERIC GAILARD | Reuters
The French government refuses to reduce the VAT, as in Spain: “It is a simple solution, but it costs public finances a lot and does not contribute anything to the consumer.”
He the French government unveiled this Monday an agreement with major distribution groups to reduce the weight of the shopping basket in French homes. The supermarkets they agreed to reduce their margins by drafting a a basket of basic products that each of them will choose and that they will carry the common label “anti-inflationary quarter”.
those products will have the “lowest possible price” at the expense of distribution margins, not farmers or industrialists, and this will mean a global cost of “several hundred million euros” in that quarter, the Minister of Economy explained to journalists, Bruno Le Maire, together with the managers of the companies involved.
“It will be a massive, efficient and protective device,” stressed Le Maire, who said it would be launched in the coming days, when everything is ready.
This – he added – “is to protect our compatriots from rising prices as best as possible” and to apply the principle that “the cost inflation It must be shared.”
There will be no common list of products, nor a minimum number of products, but each chain will decide which and how many to selectbut all those chosen will wear a common logo with the colors of the French flag and the inscription “anti-inflationary quarter”.
Le Maire justified the absence of a common basket for all brands on the grounds that commercial freedom must be guaranteed and because It is not up to the Government to set prices..
Control to avoid rogues
Anti-fraud services will be responsible for checking compliance with the “lowest possible price” rule. it is applied through the reduction of distribution margins, not through cuts imposed on other participants in the chain.
In this regard, the Minister of Economy announced today their offices will publish the figures for the margins of farmers, producers and distributorsand these reports will be published every quarter “so that everything is done transparently”.
Rejection of lower VAT
Asked why VAT on food or other products to reduce the price for the consumer, the head of the economy resolutely answered: “It is a simple solution, but it costs a lot of public finances and does not contribute anything to the consumer”.
On the other hand, he announced that when this “anti-inflationary quarter” ends in June, he will ask industrialists to reopen price negotiations with distribution groups, without waiting for the beginning of next year.
In this way, he intends to lower sales prices for industrialists if the trends of the last few days are confirmed, for example, with the drop in maritime transport costs. “There is no reason for price increases to be passed on immediately, and reductions not to be passed on immediately”argument.
In anticipation of today’s announcements, Carrefour Already this Sunday, it presented the operation, which consists of offering customers of its 5,945 stores in France from March 15 to June 15 a basket of 200 basic products at limited prices of less than two euros.
Its chief executive, Alexandre Bompard, pointed out this Monday in an appearance with the rest of those responsible for distribution and with Le Maire that each company will have a different device to maintain commercial freedom, but assumed that the selected products would essentially be private labels.
The reason given by Bompard is that with them each distribution group has greater flexibility in playing with its margins.
Source: La Vozde Galicia
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
