Nutella, Coca-Cola, Ricard … Why the Prices of More Than 500 Products will Increase

Finance General News
Big brands, including Coca-Cola, will increase the price of their products in France

The prices of hundreds of consumer products will increase this Friday, February 1 in stores. Why and how will they apply?

Here is a news that consumers would be happy at the beginning of the year, when the lack of purchasing power is at the heart of the yellow vests crisis . As of February 1, 2019, the prices of many consumer goods will rise.

Coca-Cola , Camembert President , Nutella , Chocapic cereals , Danette yogurt , Ricard … According to Le Parisien , 24 consumer goods will grow by 6.3% from Friday. In supermarkets, it is actually “500 products out of 13,000” that should increase, and “800 products out of 20,000” in hypermarkets, according to the Minister of Agriculture Didier Guillaume. The latter has confirmed, by relativising, the information published in the press.

On franceinfo this Wednesday, January 30, the minister has strongly criticized mass distribution groups:

“What I ask supermarkets is to find a way to spread the margins differently, to distribute things better. The objective is for agricultural products to be sold at fair value.”

Why this increase? 

This price increase is the direct result of the application of the new Food Law . It provides for a 10% increase in the resale threshold at the loss of the distribution. 

Thus, supermarkets will no longer be able to sell at a loss the appeal products on which they base their communication. These will have to be sold at least 10% more expensive than they were bought.

The Food Law comes from the General States of Food, which aimed to allow farmers to live decently from their work . Today, they are the only ones who can not set their cost prices.

Minister Didier Guillaume specifies: 

“The law does not say that it is necessary to increase the Nutella, it stipulates that a big surface can not sell products to the consumers cheaper than what it is worth.”

What consequences for our portfolio? 

Will consumers lose a lot of purchasing power? According to the Minister of Agriculture, the additional expense will be “roughly 50 cents more per month “. 

In addition, only 4% of products in supermarkets will be affected by higher prices. 

In fact, it is mainly the big brands that will see their prices increase significantly. Thus, a package of cereals Chocapic (430g) will be sold 9.3% more expensive. A bottle of Coca-Cola (1.25L) will see its price climb by 6%. Caprice des Dieux cheese (300g) will take 3.7%, while the price of the famous Nutella spread (a 750g jar) will flare up by 8.4%.

According to the newspaper Les Echos , food prices will increase on average by 1.3% while “star” products will see their labels take 5 to 6%. Of the 24 products selected by Le Parisien , (Joker orange juice, Evian water, Carte Noire coffee, Guigoz milk, Panzani pasta …), the basket will cost almost 85 euros against just under 80 euros before.

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