© Reuters. FILE PHOTO: Alexandre Bompard, Chairman and Chief Executive Officer of French retailer Carrefour, attends the MEDEF union summer forum “La Rencontre des Entrepreneurs de France, LaREF” at the Paris Longchamp Racecourse in Paris, France, August 30, 2022. R
PARIS (Reuters) -The CEO of French retailer Carrefour (EPA:) on Tuesday urged the government to delay a law putting a cap on promotions retailers can offer, warning that consumers have made massive cuts to spending on essential goods owing to high prices.
Carrefour Chairman and Chief Executive Alexandre Bompard, who is among French retail executives due to meet Finance Minister Bruno Le Maire on Wednesday to discuss cost of living issues, said he would ask for “a one-year moratorium on the application of the Descrozaille law” that limits promotions on beauty, hygiene and care products.
“We are seeing a non-spending tsunami in France. When essential staples are no longer accessible, when people go without essential goods, one must act,” Bompard told Franceinfo radio on Tuesday.
The Descrozaille law due to take effect next March caps to 34% promotions a retailer can offer on beauty, hygiene and care products. Today, however, Carrefour, is free to sell washing powder at a 60% discount, Bompard said.
The law was initially aimed at providing a more balanced relationship between retailers and producers in price negotiations. The 34% cap on promotions, however, been decried by retailers that say it limits their bargaining power with large suppliers.
The law benefits only three major global multinationals, Bompard told Franceinfo, citing Procter & Gamble (NYSE:), Henkel and Unilever (LON:).
Le Maire in March secured pledges from 75 food producers to cut prices on hundreds of products, but a junior minister last month said that only about 40 had done so.
On Tuesday Le Maire vowed to step up pressure on retailers and producers to accelerate price cuts.
“We are on the right track,” he said. “Prices are now falling because we have intervened, because we put pressure on retailers and producers and because we will continue to do so.
“I am meeting retailers tomorrow and the producers the day after tomorrow … with one objective: accelerate the fall of prices.”
Le Maire said he would ask them to widen the range of products on which retailers and producers can make an effort on prices. He also wants more producers to cooperate.
“There are 35 today. I think we can have more producers joining us in this fight against the high cost of living,” he said.
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