By announcing last week to sell its baguette for 29 euro cents for at least four months, in order to protect the purchasing power of the French, E.Leclerc created the event and quickly provoked a controversy.
How is it possible that the brand can offer such a low price, denounced in chorus bakers, farmers and other distributors?
The opportunity to detail the cost of this highly symbolic product.
Read alsoBad price blocked: the calculated controversy of the E. Leclerc centers
If we are asking questions on the side of bakers, it is because the average price of a baguette in France today is 90 cents, according to INSEE. Its production cost represents "
75 to 80% of this total
" for artisan bakers, or around 70 euro cents, estimates Dominique Anract, president of the National Confederation of French Bakery and Pastry (CNBPF). In detail, it is the workforce that weighs the heaviest, since wages and charges represent 30 to 40% of the price, comments the professional. Fixed costs (rent, energy, water, etc.) account for around 20%, and raw materials (primarily flour) for 15%. If we remove the VAT, the bakers' margin is "
between 10 and 20%
of the price paid by consumers, concludes Dominique Anract.
In a study carried out in 2018 for FranceAgriMer, the firm Agrex Consulting had arrived at a production cost of the artisanal baguette slightly higher than the calculations of the boss of the CNBPF.
Based on statements by industry experts, the authors of the report estimated it at between 80 and 92 cents.
Including 50 to 57 cents for labour, 15 to 20 cents for raw materials, 10 cents for fixed costs and 5 cents for VAT.
The baker's margin was estimated at between 8 and 20 centimes per baguette.
Always margins even at 29 cents
On the retail side, the cost price of a baguette - often industrial - is much lower, according to E.Leclerc. Indeed, even by selling it for 29 cents, the brand continues to make margins, assured BFM Business Michel-Edouard Leclerc, the famous president of its strategic committee. Contacted, the brand refuses to give details of its costs. She is content to affirm that "
the raw material represents approximately 15% of the selling price
", swearing that selling the baguette at 29 cents "
has no repercussion on the purchase price for flour suppliers and cereal producers
" .
. In a post posted on his blog, Michel-Edouard Leclerc also defended himself by saying: “
The material cost to make a wand is about 14% of the selling price.
That leaves room to pay salaries, electricity and taxes… doesn't it?
“No question of selling at a loss, he swears, this practice, consisting in reselling a product cheaper than its effective purchase price, being prohibited by law.
Read alsoThe €0.29 baguette at E.Leclerc is controversial
Dominique Anract, he finds it hard to believe. “
I really want him to teach us to count
,” quips the boss of the confederation of bakers. It is difficult to imagine, according to him, that the cost price of E.Leclerc actually takes into account personnel costs and fixed charges. The brand is not a special case in mass distribution. Lidl indeed announced this Thursday morning that it was going to align itself with E.Leclerc and also offer the baguette at 29 cents. “
The whole distribution will follow
it,” assured RMC Michel Biero, executive director of Lidl France, adding that “
it had been ten years since the entire French distribution sold this baguette at 35 cents.
". So already at a price much lower than that offered in bakeries. If supermarkets can afford it, it's because they "
crush supplier prices
", criticizes Dominique Anract. The purchase of large volumes also allows brands to pull down the prices of raw materials, which are reflected in the final product, for which the margin is also cut to the maximum.
The commercial operation of E.Leclerc goes all the more badly as all the expenses of the artisan bakers are on the rise, warns Dominique Anract.
"
Wheat
has exploded lately
, the minimum wage has increased, as has electricity
", lists the president of the CNBPF, forcing certain professionals to pass on this increase in the cost price to the price of the baguette.
