Trade negotiations: “There are bastards everywhere,” according to Richard Panquiault and Dominique Schelcher


The 2023 trade negotiations began in open crisis, following MP Frédéric Descrozaille’s bill, approved this week. Collected by the JDDthe head of the Système U cooperative, which brings together 1,500 companies, and the director of Ilec, (Institute of Liaison and Study of Consumer Industries) which represents 90 of the main manufacturers of consumer products, are mutually responsible for the inexorable price increase

Why did the bill to “secure the supply of French consumer products” catch fire?
Richard Panquiault: Two measures seemed essential to us in the current context: the increase in the threshold for sales at a loss and the supervision of promotions. However, unless legislated, they expired on April 15.
Dominique Schelcher: Another measure triggered the unprecedented mobilization of distributors: it provided that in case of disagreement on the legal closing date of the negotiations, the price of the suppliers would be imposed. Our fear was that this point would lead to more inflation. Our mobilization made it possible to avoid this risk.

Why is the pitch so high?
PR Due to the misinterpretation of the text. We said: “It is these bastards of multinationals represented by Panquiault who are still going to plot things.” »
D.S Let’s just say that they are everywhere, both in groups and in large distribution. That’s fine, it’s a tie.

More specifically?
PRSmall, medium and large companies face increases in manufacturing costs of 15% on average. Without agreement with the distributors, the doctrine wants the price of the previous year to be applied. Economically it is unbearable.
D.SI have a comprehensive list of your member’s increase requests – they range from +19% to +30%… So we are closer to +20% on average this year.

Without shared observation, how to negotiate?
PRThe law has created a mediator of commercial relations: he should take stock of all these prices. It’s all a matter of mood. Some dealers are not constructive. We were afraid of his “it’s my take it or leave it” attitude.
D.SI remind you that the government asked us to renegotiate prices during the year. We have already accepted up to six increases in 2022.

Can we achieve more transparency?
PRWe are facing a slightly crazy device. It authorizes a manufacturer to say to a dealer “I can show that my costs have gone up, but I won’t show it to you until a month after I sign with you.” The new bill goes back to that. We polled our members: 60% of them say they will give this certificate. This is what I want to pursue, whether the law passes or not.
D.SThat means 40% might not make it… The more transparency there is, the more likely the manufacturer will get the price they want.
PRDealers’ absolute fear is accepting a raise when a competitor hasn’t. That’s why the system never worked.

How is your business?
D.SFor months, the volume of sales has been decreasing. People arbitrate: They went from 40 to 37 products in their cart. This worries us a lot. If inflation and falling volumes continue, it will turn against everyone: farmers, manufacturers, distributors.
PRTo suggest that inflation can be blocked is the wrong message. Commodities continue to rise, transport tensions persist… and for us, no major state aid. Hence our increases.

Will they continue?
PRManufacturers asked for +7% in 2022 and got an average of +3 to 3.5%. Renegotiations during the year affected 70% of suppliers. 30% benefited from a third revision. We reach an average of between +5.5 and +6%.
D.SIt’s more than that, as the INSEE reaches 12.6% food inflation!
PRIt barely exceeds 5% in the big brands.
D.Stell me something My shop is near the German border. For forty years, French manufacturers have been selling their products at lower prices in Germany. When we ask for the same prices, we are told “strategic choice” and “end of inadmissibility”. You sell structurally more expensive in France.

Why this difference?
PRAll the big groups say that the profitability of their French subsidiary is the weakest in Europe. Prices in France are lower than in the rest of the European Union.
D.SIn value, but the results of distributors in other European countries are superior to ours. If your margin went down today, it’s still significantly higher than ours.

When will the tags start dropping?
D.SPrices have started to drop, but almost no suppliers are passing this drop on. Regarding oil, for example, one of the big players tells us that it is.
PRThe volatility of agricultural and industrial raw materials remains a reality. When you have to wait six months for the distributor to finally agree to pass on the increase, when it goes down, we can understand that it is not immediate.
D.SThis is true. No one wants to hear about these review clauses. We make complex laws, we don’t enforce them.

How to find serenity?
D.SIt will be complicated. A government bill would have been quieter than this proposal that had everyone tense.
PRThat’s why the biggest increases come from the most energy-intensive industries. We have 30-40% of companies for which energy will double or even sextuple. And the government leaves us for now to fend for ourselves.

Source : Le JDD

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