“We learned the news just a few hours before its publication,” notes a representative of the sector, while the brands are not increasing their enthusiasm at the possibility offered to them of losing money.
For several days, distributors have been explaining urbi et orbi, as if with regret, that they could not not do more to lower fuel prices. “Chick!“, the government replied this weekend. A bill tabled at the beginning of October should allow them to sell it at a loss starting in December, for a period of six months.
All distributors are invited this Tuesday morning to Bercy to clarify the scope of this unexpected measure. “We learned of the news just hours before it was published in The Parisian. She left us speechless», says a distributor.
Suffice to say that the brands are not increasing their enthusiasm in the face of the possibility offered to them of losing money by selling fuel. As of Monday, none had yet officially reacted to the government announcement. Unofficially, one of them speaks of a “trap”and another deplores “a policy of scribbling, big nonsense”. “We are not philanthropists: if we sell fuel at a loss, we will have to make up for it elsewhere and sell consumer products more expensively”explains this distributor.
The distributors played the game very well with the anti-inflation basket.
A source in Bercy
Will brands use this new right? The government ures that it has no intention of twisting their arm. “This is just a new tool made available to them to lower priceswe emphasize in Bercy. The distributors played the game very well with the anti-inflation basket, this time it is about giving them the possibility of keeping the price of fuel below 2 euros per liter. For them, fuel is a loss leader.”
The signs are less positive. “If this ban on selling at a loss has existed for so long without any distributor ever wanting to challenge it, it’s because we need it to earn our living”specifies a distributor. TotalEnergies has, for its part, committed to capping unleaded and diesel at 1.99 euros per liter, but it can draw on its production margins.
Distribution, “public service mission”
A distributor anticipates: “There is only one who will really play the game, it’s Leclerc. The others will just show off by offering a reduced-price weekend here or there.” Not all brands will be as well equipped to face this extremely costly measure. E. Leclerc centers should aim to remain less expensive than their competitors food distributors.
Last week, Michel-Édouard Leclerc boasted, on his blog, of selling fuel cheaper than the 1.99 euros per liter promised by TotalEnergies. But other brands will not have the means to sustainably sell their fuel at a loss. If their price becomes attractive, they risk seeing their fuel sales soar… just like their losses.
Distributors find themselves, in fact, caught in their own trap. The Covid epidemic and food inflation have contributed to making them into “welfare companies” responsible for protecting the French and “exercising a public service mission”underlines a note written by Jérôme Fourquet and Raphaël Llorca and published last year by the Jean-Jaurès Foundation.
Suppliers versus distributors
In recent months, brands have increased operations intended to protect the purchasing power of the French, competing with promotions and other operations at cost price. All of them have, at one time or another over the last two years, sold fuel without margin; all offered anti-inflation baskets, made up of items at tight prices, or even at cost price at Système U. At the same time, distributors accuse their suppliers of fueling the rise in prices to preserve their margins. But distributors also need to earn a living, even if they prefer not to have to remind them of it.
Selling fuel at a loss could at least have one virtue, hopes a distributor: contribute to obtaining a moratorium on the Descrozaille law ped last year. The bane of distributors, the latter provides for a 34% cap on promotions on hygiene and beauty products.
“This cap will once again hit the French people most in difficulty, by increasing the margins of the giants of the sector”underlined Alexandre Bompard, CEO of Carrefour and president of the Federation of Commerce and Distribution (FCD) in a letter sent on September 7 to Bruno Le Maire And Olivia Gregoirethe Minister of Commerce. Given the government’s desire to authorize the sale of fuel at a loss, this limitation on promotions seems completely incoherent. underlines a distributor.