French government to step in to end costly bread price disparity

The government will step in to avert a rise in the cost of bread, with legislation likely before the end of the year to prevent retailers exploiting the middlemen that bring about the cost…

French government to step in to end costly bread price disparity

The government will step in to avert a rise in the cost of bread, with legislation likely before the end of the year to prevent retailers exploiting the middlemen that bring about the cost difference between baguettes and other products.

France’s national consumer watchdog (OLAF) said recently that an estimated 300 billion bagsuites are sold in France and that a large part were being sold at a profit. Sales of the baguette alone have risen by 17% over the past four years.

Heavier bakeries and producers of baguettes typically pay an agent a commission of between 2% and 5% of the price of baguettes on the market, cutting the price of the bread by at least one third, and the profit margin by 50% or more.

The new proposal would entail a ban on short-term and unregistered agents and also would limit the involvement of the buying agents in the cultivation of baguettes.

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Falling food prices abroad have prompted some retailers to increase prices, and there are fears that major food retailers in France will be able to raise the price of bread due to a loophole in French law. The country’s rate of growth in consumers’ disposable income is below zero.

“The practice of unjustified and long-term exploitation of food products, and the incoherence between means of exchange, like the sale of freshly baked bread, and the existence of products on the market at a huge markup, bears witness to the strong monopolisation of a select number of significant categories of products, and an increasingly high degree of price discrimination,” OLAF said in its report published in late September.

The government will define next month whether the beef mayonnaise on sale is a commercial or a unique product, a move that has contributed to the discounting of the product, OLAF said in its report.

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