New French law pushes up cost of food for grocers

Feb. 1 (UPI) -- A new French law increasing food costs nationwide kicked in Friday, as the country redistributes more money to the farmers producing the goods.

The law raises the price on hundreds of food items by as much as 10 percent. French grocery stores historically have made 30 to 40 percent profit on fruits, vegetables, milk and meats.

"What I ask of supermarkets is to find a way to spread their margins differently, to better distribute things," French agriculture minister Didier Guillaume said. "The goal is that agricultural products are sold at their proper value."

Popular items going up in price include President Camembert cheese, (by 8.6 percent), Nutella (8.4 percent) and Ricard pastis (10 percent).

The bump in price is intended to make it impossible for big brands to sell food at a loss and pass more on to the country's small producers. Officials said the law is intended to affect major store chains, not small shops.

The measure has been a key part of President Emmanuel Macron's campaign promise to help farmers who have engaged in price wars with grocery stores. Competition has benefited consumers, reducing food prices, but hurt farmers.

"For several decades, administrative regulations aimed to increasingly lower prices, which put farmers in an impossible situation: today, most sectors are not able to cover the cost of production. This cannot last," said Patrick Benezit, deputy general secretary of the Fnsea, France's main farmers' union.

There's nothing to actually force supermarkets to reduce profit margins -- it's supposed to be done in good faith.

"The problem is that farmers will probably not see this money," said journalist Lionel Maugain, adding farmers and retailers need to agree on a price during annual negotiations.

"That's the only way this will work," he said. "It's not through raising prices with the hope that the new margin will go back to French producers. That won't work."

Many farmers joined the "Yellow Vest" protests over the last few weeks, unofficially. The protests forced the government to delay the implementation of the law from December to Feb. 1.