A plan by French Finance Minister Nicolas Sarkozy to cut prices of major brands sold in leading retail stores has got a mixed reaction from analysts who say consumers may see little impact on their pocketbooks.
Sarkozy is pressing for a price cut of three percent in September, followed by one of two percent next year only on brand items, which represent only half of sales in major retailers.
Technical details of the plan are to be finalised by June 17.
The cut, the cost of which would be borne by retailers and top manufacturers, would affect only consumer items such as food, beauty and cleaning goods and not textiles or electronics.
In addition, the September price cut will be in relation to January 2004 prices to prevent abusive hikes this summer. Many retailers led by behemoth Carrefour have already launched spring sales.
And the three-percent drop involves sectors where prices have soared since 2000 - 22 percent for personal hygiene products, 15 percent for children's food and perfumes, 13 percent for cleaning products.
Since prices for leading brands in France are five to 13 percent more expensive than in neighbouring European countries, Sarkozy's proposed cuts remain modest in comparison.
Meanwhile smaller retailers fear that the proposed Sarkozy cuts will reduce their profit margins.
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