While Martinique rises up against the high cost of living overseas, on the island of Reunion, the Observatory of Prices and Margins (OPMR) is operational. To the point of communicating not on the listing of the Price Quality Shield (BQP) as was the case in 2023 by the Mayotte OPM, but on its difficulty in effectively controlling price formation. “The members of the working group encountered numerous difficulties which relate to the complexity and relative opacity of the large-scale distribution sector, predominantly food, in Reunion,” indicates the OPMR.
The advisory body depends on the ministries responsible for Agriculture and the Economy, which are led by the services of the prefecture of each department, alongside parliamentarians, the president of the mayors’ association, the president of the Regional Council ( Departmental for Mayotte), the President of the General Council, representatives of employee and employer unions and qualified personalities.
Among the obstacles to the study of prices, the reluctance of large retailers to communicate, “non-compliance with publicity of accounts on the part of certain companies in the sector” or “the opacity maintained by certain distributors, in particular on the question of rear margins”, but also the lack of allocated resources, “the insufficiency of institutional statistical monitoring tools, the insufficiency of state control means, the insufficiency of legal levers at the disposal of the OPMR to enable it to fully fulfill its missions,” denounces its working group.
INSEE at the center of the action
To move towards more transparency, it is necessary, according to the OPMR, to implement 5 actions. First of all, it is a question of enforcing the law which requires publication of the annual accounts of companies, but not all do so, due to lack of “dissuasive sanctions”.
Then, and because it is the ideal partner, INSEE should be able to digitally receive receipts which correspond to the products targeted by its monthly publication of the consumer price index, which would allow “the implementation by INSEE of a price monitoring tool on the main consumer products in Reunion and thus have a new indicator on the evolution of product prices.
INSEE which is also invited, alongside Customs, the DGFIP (Public Finances, the DEETS (Labor and Employment) and the IEDOM (Issue of banknotes) to demonstrate greater transparency themselves, while these organizations and administrations “hide behind business secrecy”. The State is also invited to provide the OPMR with more human resources.
“Back margins” put forward
As part of better transparency for mass distribution companies, the theme of “rear margins” returns, which must be changed. Rear margins are price reductions, rebates, granted by the supplier to the distributor, after signing a contract. Hence the term “rear”. They are added to the margin made by the distributor. Since they do not appear, the latter does not automatically reflect it in the final price, preventing the consumer from benefiting from it. On the other hand, the supplier will pass this discount on to its selling price, which impacts the consumer who therefore suffers a double penalty. The OPMR suggests replacing these rear margins with invoice discounts, “for more transparency and to put an end to their potentially inflationary impact”.
These flaws in the control of price formation had been denounced by the general president of the IEDOM himself, during his visit to Mayotte in August 2024. Ivan Odonnat called for more controls of large-scale distribution in particular on the Quality-Price Shield (BQP), “I am not sure that it respects the charter”, he declared. Adding that overall, companies direct their profits “towards external growth operations, towards other markets, but investments are not consolidated locally in Overseas Territories. »
The Mayotte Observatory of Prices, Margins and Incomes must seize this opportunity from the work carried out by its Reunion alter ego to make the same demands, because in Reunion, the members of the working group explain that they were unable to explain the The difference in the price of food products between Reunion and mainland France during the last INSEE publication. It was “out of reach” explains the OPMR for the reasons explained above, only a few brands played the game by communicating on the prices and margins of 21 products.
A.P-L.
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