:. Food Industry News


French Minister Goes to Germany to Sell Shop Law

Source: Reuters
21/05/2008

Kehl, Germany, May 20 - A French minister struggling to sell a retail reform back home, went shopping in Germany on Tuesday to prove that food was much cheaper on the other side of the Rhine.

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The government is looking to drive consumer prices lower in France by encouraging the building of supermarkets, but is facing stiff resistance because of fears that this will force small shopkeepers out of business.

Looking to promote his cause, Consumer Affairs Minister Luc Chatel first bought a selection of goods in the eastern French city of Strasbourg and then popped across the border to buy the same things in Germany for 15 percent less.

"This is the proof that as far as the major brands are concerned, the French law is perverse and structurally inflationary," Chatel told reporters after his shopping trip.

At present any new store with projected floor space of more than 300 square metres (3,230 square feet) needs to undergo an often lengthy review process by a panel of local authorities and other retailers.

The government reform, which is part of a wider package of economic changes, proposes lifting that threshold to 1,000 square metres in the hope of promoting the growth of discount outlets, which are often frozen out by the established stores.

The law is due to go before parliament on May 27 and faces opposition even from supporters of the centre-right government, who fret about the outlook for small retailers.

However, the overriding concern of French voters is the growing cost of living and President Nicolas Sarkozy's government is convinced that even a limited liberalisation of the retail sector could work wonders on prices.

Chatel said that some of the top brands were 20-30 percent percent cheaper in the German shops, just a few kilometres (miles) from France, despite a higher sales tax.

Cheese, however, was cheaper in France.



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