France Food and Drink Report Q2 2008

Publication Date	April 2008
Publisher	Business Monitor
Product Type	Report
Pages	76
ISBN Number	not applicable
Product Code	BMI01642

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Summary

Rising food prices have become a political issue in France and have also triggered several spats between producers and retailers over who is responsible for the price increases. It is interesting to note that European Central Bank figures suggest that consumer food price inflation in France is actually below many other EU countries including Spain and Germany. However, this fact seems to have little effect on the public perception that certain French companies are profiteering from rising commodity prices, and a loss of purchasing power has become an increasingly salient political issue. In February 2008 France's Prime Minister Francois Fillon claimed that food producers and retailers were using the rise in the price of agricultural products to expand their profit margins, and this view was also expressed by French President Nicolas Sarkozy who suggested that the price increases were not normal and that he was ready to intervene over the issue.

This growing political controversy was partly prompted by the March issue of consumer magazine 60 Million Consumers, which printed a list of over 1,000 supermarket prices, based on information derived from supermarket websites, which suggested that the price of basic foods, such as yoghurt and pasta, had risen by between 5 and 40% over the past year. Retailers are quick to blame suppliers for these perceived price increases, and in February 2008 E. Leclerc launched a campaign against manufacturers who raise their prices above the rate of commodity cost inflation. This campaign culminated in the firm removing six product lines from its shelves including brownies made by Brossard, La vache qui rit (Laughing Cow) cheese made by the Bel Group and Pulco syrup made by Orangina.

These developments prompted Prime Minister Fillon to launch a nationwide investigation into the country's rising food prices. However, the initial results of the study, which looked at the price of 20 food staples in 5,700 retail outlets, suggested that food retail prices had risen by an average of just 5% over the last year. Although high by historical standards, this rate of inflation trails a long way behind the actual increase in the cost of many commodities, such as milk and wheat, suggesting that in actual fact firms are simply attempting to pass on some of the commodity cost increases to consumers. This has been borne out by the fact that both French retailers and food producers have generally reported only average results for the last year. The general secretary for the Federation of French Bakeries and Pastry Enterprises summed up the situation saying '[consumers] don't understand why prices have gone up like this; they think that someone is profiting from this. But it's not us. We're paying.'

Content

Executive Summary
Business Environment
Western Europe Food & Drink Business Environment Ratings
- Table: Regional Food & Drink Business Environment Ratings
France's Food & Drink Business Environment Ratings
Global Food & Drink Business Environment Ratings
SWOT Analysis
Mass Grocery Retail
France Mass Grocery Retail Industry SWOT
Food And Drink
France Food And Drink Industry SWOT
Macroeconomic Outlook
- Table: France - Macroeconomic Forecasts
Retail
Regional Overview: The 'Greening' Of MGR In Western Europe
- Table: MGR Eco-Friendly Strategies In Western Europe
Industry Forecast Scenario
- Table: France Mass Grocery Retail Sales By Format (US$bn) - Historical Data & Forecasts
- Table: Grocery Retail Sales By Format
Industry Developments
Market Overview
- Table: Structure Of France's MGR Market By Estimated Number Of Outlets
- Table: Structure Of France MGR Market - Sales Value By Format (US$bn)
- Table: Average Value Of Sales Per Outlet (US$mn) By Format 2006
Food And Drink
Regional Overview: Confectionery In Western Europe
- Table: 2006 Western Europe Market Share (%)
- Table: Western Europe Confectionery Market Share By Category (%), 2005
Industry Forecast Scenario
Food
- Table: France Food Sub-sector Sales - Value/Volume of Selected Categories
- Table: France Food Consumption Indicators
- Table: France Non-Alcoholic Drinks Sales Indicators (US$mn)
- Table: France Alcoholic Drinks Sales Indicators (US$mn, Unless Stated)
Industry Developments
Agriculture
Food
Drink
Market Overview
Agriculture
- Table: France Agricultural Sub-Sector Production
- Table: France Organic Agricultural Data
- Table: France Dairy Production, Farming & Consumption
Food
Drink
Tobacco
Industry Forecast Scenario
- Table: France Tobacco Indicators
Industry Developments
Market Overview
Competitive Landscape
Key Players
Mass Grocery Retail
- Table: Key Players In France's Mass Grocery Retail Sector - 2007
- Table: Key Players In France's Mass Grocery Retail Sector - 2007 (continued)
Food And Drink
- Table: Key Players In France's Food & Drink Sector - 2006
Regional Company Case Studies
Drink: The Coca-Cola Company in Western Europe
- Table: Unit Case Volume Growth (%)
- Table: Revenue And Income For EU (US$mn)
Drink: Diageo In Western Europe
- Table: Diageo's Strongest Brands And Future Strategy For Western Europe
Mass Grocery Retail: Ahold In Western Europe
- Table: Ahold Financial Results, 2003-2006 (EURmn)
Company Analysis
Mass Grocery Retail
Carrefour
Groupe Auchan
Groupe Casino
Food
Groupe Danone
Nestl France
Drink
LVMH Group (Moet Hennessy Louis Vuitton)
Pernod Ricard
Food & Drink Ratings Appendix
Introduction: Revised Methodology
Ratings Overview
Ratings System
Indicators
- Table: Limits Of Potential Returns
- Table: Risks To Realisation Of Returns
Weighting
- Table: Weighting
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Retail Industry
Sources