French growers disagree with fruit and vegetables agreement

Fruit and vegetable growers are not happy with the agreement which was signed on 17th May. French president Sarkozy wants to limit profit margins in the fruit and vegetable trade with this agreement. The main aim is to strengthen the position of the agricultural sector in times of crisis. France wants to achieve this by decreasing
prices in periods of oversupply and in this way to stimulate consumption and to decrease the stock.

Seven large French chains are involved in the agreement: Auchan, Carrefour, Intermarche, Leclerc, Système U, Cora and Casino. Therefore the larger part of buyers of fresh products. These large French shop chains are satisfied with the agreement, the reactions from growers are a little more mixed.

In his speech about the agreement French president Sarkozy explained the agreement as follows: this agreement makes it possible to decrease the selling price for the consumer or to increase the purchase price for the grower. This last arrangement is a big problem for growers, as in the agreement of 17th May only the lower selling price for the consumer was mentioned and an increase of purchase price may have important consequences. The growers fear a limitation of their freedom. There is a possibility of a power struggle between growers and distributors.