Carrefour offices searched in French agriculture pricing investigation
Reuters
February 14, 2016, 11:51 pm
The logo of Carrefour is seen at the entrance of the Carrefour's Bercy hypermarket in Charenton Le Pont, near Paris, August 29, 2013. REUTERS/Charles Platiau
PARIS (Reuters) - French retailer Carrefour has had its offices searched as part of an investigation into its commercial practices, the company said on Sunday, two days after the government warned companies against squeezing further price cuts from farmers.
Milk and meat producers in France have held repeated demonstrations in protest at being forced to operate at a loss because of overcapacity and aggressive pricing pressure from retailers.
Carrefour said in a statement that its offices in Massy, south of Paris, had been searched on Tuesday by authorities investigating some of its ongoing commercial negotiations.
"It is of utmost importance for Carrefour to apply current regulations and if mistakes have been made the company will take the necessary measures," the company said.
In a joint statement on Friday, Agriculture Minister Stephane Le Foll and Economy Minister Emmanuel Macron warned retailers and the food industry not to push for lower prices from farmers and reminded them that companies found to have employed abusive trading practices could be fined up to 5 percent of their revenue.
The French government has no power to impose how much retailers and the food industry pay farmers, but it has boosted the number of inspections by its Competition, Consumption and Fraud Directorate (DGCCRF) to check that legally required contract negotiation procedures are being followed.
"In light of French animal farmers' plight, the ministers have made clear to the retail and food processing industries that it will not be acceptable that the 2016 commercial negotiations lead to lower prices, in particular for milk products," Le Foll and Macron said in a joint statement.
The ministers added that they are ready to tighten regulation if this objective is not achieved and that they have launched an audit of the sector.
"DGCCRF will control how the talks proceed so that any abusive practices are immediately sanctioned," they said.
The website of French newspaper Le Figaro reported that Carrefour was asking suppliers to agree to lower prices as a precondition for starting talks and said that the economy ministry had warned this could lead to legal action.
It also said that agro-food association ANIA had complained that Carrefour had asked regional suppliers close to its warehouses to grant discounts of between 4 percent and 6 percent of turnover, refusing even to meet sellers unless they agreed.
Carrefour shares fell by 7 percent last week and are down 24 percent over the past three months.
(Reporting by Geert De Clercq; Editing by David Goodman)
