France does another deal to drag down food prices, this time with manufacturers including Unilever

France’s finance minister has secured another deal to combat rising grocery prices for consumers, with firms such as multinational Unilever agreeing to cut prices on hundreds of products.

Finance Minister Bruno Le Maire said French shoppers would see lower prices from July, and has warned companies who fail to follow through may be hit with financial sanctions.

Le Maire said 75 food companies could be named and shamed to the public if they don’t live up to their promise. The firms are responsible for 80% of what the French eat, the minister said.

The minister said pasta, poultry and vegetable oil were some of the products on which prices will be decreased, but the cost of beef, pork and milk would not.

In March Le Maire reached agreement with retail groups for an “anti inflation” quarter,  with retailers cutting prices for a wide range of foodstuffs "to the lowest possible level" until June.

Food prices have been rising in France, and in other European nations. Food inflation was 14.9% in France in April year-on-year, and food prices in the UK rose 19.1% for the same period, the second-highest increase in 45 years.

The UK is reportedly planning a voluntary cap on the price of basic food items such as milk and bread, similar to the earlier deal struck in France. Hungary has also tried to bring down the cost of food, introducing price caps on "staple foods".

In the European Union consumer food prices were on average almost 17% higher in April than a year earlier.

In New Zealand, Commerce Minister Duncan Webb said price caps were not a priority.

He said price caps may help address short-term affordability concerns, however, there could be unintended consequences including discouraging producers from supplying goods due to reduced profitability, stifling innovation, and lead to shortages or lower quality products in the long run.

Raewyn Bleakley, Chief Executive of the New Zealand Food and Grocery Council said freezing prices can cause challenges to any business, and the suppliers it represents are no different.

“Food and grocery suppliers are in a highly competitive environment and are constantly looking for efficiencies and having to balance many factors beyond their control. Setting the prices they sell their products at to retailers involves negotiation and it is entirely up to the retailers what they set the price that the products appear on the shelves at and consumers ultimately pay.”

Webb said his priority was addressing food-price inflation by tackling excess profits in supermarkets through the Grocery Industry Competition Bill.

The legislation includes forcing the current big two – cooperative Foodstuffs and Aussie-owned Woolworths – to open up wholesale networks to competitors at prices that could be set by a regulator if they don't make deals in good faith.

A grocery commissioner is also set to be appointed to oversee competition in the industry, with an appointment expected soon.

Statistics NZ's food price index rose 12.5% in the year ended April, the highest annual rate since late 1987.

The next Food Price Index will be released on June 14.

The latest Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index reported an 8.8% annual increase in what suppliers charged supermarkets for goods in May.

The index measures the change in the cost of 60,000 grocery goods charged by suppliers to the Foodstuffs North Island and South Island cooperatives.