French government investigates food manufacturers

The French government has strongly criticized the country’s food manufacturers and retailers, and launched a nationwide probe to pin down responsibility for soaring retail prices. The state competition authority started analysing the prices of 20 staple food products in France's six main retail chains, as President Nicolas Sarkozy had promised to combat "abnormal" price hikes.

An official report has recorded hikes of 5 to 48% on everyday supermarket produce such as milk and yoghourt, pasta, rice and ham, between November and January. Prime Minister Francois Fillon said the government would investigate why prices had risen faster in France than in neighbouring European countries, and threatened action against such market "abuses."

Fillon noted, “There have clearly been abuses on the part of manufacturers and retailers who are profiting from the rises in commodity prices to increase their margins."  Retailers have categorically rejected the accusation, saying they had already cut their margins to reduce price rises.