Groupe Avril's managing director Jean-Philippe Puig has criticised the low retail prices of oil products brought about by price wars among France’s hypermarket chains.
Speaking with French news source LaFranceAgricole.fr, Puig described what he perceives as the disconnect between the rising costs of raw materials and the falling costs of SKUs in large-scale retail as “just scandalous,” and believes the dynamic as it stands will “kill industry.”
Groupe Avril is the number one oil producer in France, with brands such as Lesieur and Puget.
He explained that the cost of olive oil rose between 15% and 16% last year, and rapeseed oil by 17%, in terms of the cost for the makers of these products, and yet the price in-store paid by the French consumer dropped by 4% for the goods.
“We are in a vicious cycle in that when you have no margin, innovation becomes impossible,” said Puig, adding that in the case of poultry, “the battle has already been lost,” given the degree to which France is dependent on imports in this sector (about 40%).
He also expressed a concern that the French egg industry is headed down a similar path. Groupe Avril controls the egg company Matines, which supplies both branded and private label eggs, and is investing heavily in free-range produce.
Avril has also invested €21 million in its condiments company Lesieur, and recently appointed a new director of oils and condiments.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. Click subscribe to sign up to ESM: The European Supermarket Magazine
