Philippe Goetzmann, distribution specialist in France: “Our system of regulatory supervision of negotiations is crazy”

Philippe Goetzmann, spécialiste de la distribution en France : “L'industrie agroalimentaire doit accepter de se concentrer”.

Consultant spécialisé dans la consommation et l'agroalimentaire, l'expert décrypte les relations entre les producteurs, les industriels et la grande distribution.

Pourquoi les relations entre ces acteurs sont-elles si compliquées ?

The first thing to remember is that mass distribution does not negotiate with producers, or only very marginally. It negotiates with manufacturers or with agricultural cooperatives, which have an industrial activity, such as Sodial. The negotiations between distributors and manufacturers are, this year, detestable. The quality of these relationships has been degraded for a very long time. And the advancement of the calendar, the stacking of Egalim laws, in the atmosphere of negotiations, has only added to this atmosphere.

For what reasons?

Our system of regulatory supervision of negotiations is delusional. The phenomenon, for example, of the deadline, generally set for March 1, but brought forward this year to January 31, is absurd. In no country does it happen like that. Things happen over time, when prices rise or when they fall. The reduction in negotiation time by 30%, from October to January, has only added tensions. It has nothing to do with the crisis. The start of the agricultural crisis ten days before the end of the negotiations further increased tensions.

But it still remains complicated.

If we put aside the permanent interference of the State and over-regulation, we are looking at more structural reasons. In France, the weight of major brands is the highest among Western European countries. And it is the one where the distributor brands are the weakest, apart from Italy. This is linked to the evolution of the food trade over the past 50 years, with a phenomenon of high concentration of national and international brands. The profitability of large retailers is dependent on negotiations with these major brands, which it cannot or does not want to do without, because their customers demand them: this creates tensions in price negotiations. Conversely, brands cannot do without distributors. We are in a prisoner's game from which no one wants to escape.

Does this lead to high prices ?

In France, food prices are more expensive than our neighbors. The profitability of large distributors, between 1% and 2%, is lower. Just look at the situation at Casino or the negative results at Auchan. That of industrialists is better, but lower than in other countries. Producing in France is extremely expensive. We have a production cost problem. If we don't address the competitiveness of agriculture and industry, we won't get through this. An example: production taxes in France, of the order of 3.8% of GDP compared to 0.7% in Germany. This is considerable. Another example, aberrant to say the least: labor to produce fruit and vegetables is 35% more expensive than in the Netherlands. Obviously, prices are affected and so are the profitability of the players.

What would be the solutions ?

The agri-food industry, like the French farm, must agree to concentrate. There are 17,000 agri-food companies in France. We'd better have half as many. In Occitania, these companies employ on average 9.2 people. If we had half as many, they would be bigger, with around twenty employees. That wouldn't be bad. This would generate more added value. The smaller our businesses or operations are, the less competitive they are. And the more they come out of high price levels.