The director of the Consumer Observatory at UFC-Que Choisir estimates a 4 to 5% increase in shelf prices in the coming months due to the war in Iran.
The increase will likely be “4 to 5% (…) in the coming months in shelf prices”, but “spread over several months”, said Grégory Caret in an interview on RMC.
Industrials and large retailers signed an agreement on March 1st that sets prices for the entire year, but “there are still mandatory revision clauses,” Caret pointed out. If energy and fertilizer prices skyrocket, “negotiations must be reopened and this must be reflected in prices,” he explained.
In the short term, the first impacts will be felt in “products with the highest turnover rates, meaning those with short expiration dates: dairy products, fresh products, yogurts, etc.,” the director of the Consumer Observatory assessed.
French dairy giant Lactalis (brands Président, Lactel, Galbani) announced that it will have to adjust the impact of the Middle East war on its consumer prices, while trying to “minimize it based on product categories.”
Next in line will be other sections: “everything related to hygiene, beauty, because these products contain a lot of hydrocarbons, packaging, and even in the manufacturing of these products,” Caret added.
Caret reassured that the increase “will not be of the same magnitude” as the one experienced due to the Ukraine war in 2022-2023, which saw a “20-25% increase in a little over a year.”
On the topic of fuel price increases, which have been significant since the onset of the Middle East war in late February but have slightly eased in recent days with the announcement of a ceasefire and the reopening of the Strait of Hormuz, Caret warned that the French will have to make “trade-offs” and will need to “give up consumption to prioritize the essentials: transportation, heating energy, food.”
