French Price Rise Expected After Iran War

In the coming months, the director of the Consumer Observatory at UFC Que Choisir estimates a 4 to 5% rise in shelf prices following the war in Iran.

The increase is likely to be “4 to 5% (…) in the coming months in shelf prices,” but will be “smoothed over several months,” said Grégory Caret on RMC.

On March 1st, an agreement was signed by manufacturers and retailers to set prices for the whole year, but there are still mandatory revision clauses,” highlighted Caret. He explained that if energy and fertilizer prices soar, negotiations must be reopened and reflected in prices.

In the short term, the first affected products will be those with the fastest turnover, such as dairy products, fresh produce, and yogurt, according to the Consumer Observatory director.

French dairy giant Lactalis announced that it will have to adjust consumer prices due to the impact of the Middle East war, while seeking to minimize the impact based on product categories.

Following will be other aisles like hygiene and beauty products, as they contain a lot of hydrocarbons in their production, packaging, and manufacturing, as stated by Caret.

Caret reassured that the rise will not be as substantial as the one following the war in Ukraine in 2022-2023, which saw a 20-25% increase in a little over a year.

Regarding fuel price hikes since the start of the Middle East war in late February, which has slightly eased with recent ceasefire announcements, Caret predicted that the French will need to make choices and prioritize essentials like transportation, heating energy, and food.