Who is now the guest on Radio Classique. The CEO of Carrefour announced his strategy for the next 4 years to his shareholders and staff. That was a week ago. He was heard yesterday by the parliamentary inquiry committee on large retailers, it was at the Senate. And before the senators, he asked the state to leave the sector's players a little more freedom and not to interfere in everything. Alexandre Bompard, hello. Hello. It's a week, I was going to say very political for you because you have to defend your profession, defend your sector and its practices which are in the crosshairs of public opinion and therefore of national representation, in this case the Senate. You also have to go see the people you work with at the agriculture fair. It's been 2 years since you've been going. And then there are ambient elements. Radio Classique was hosting at 7 o'clock the president of the dairy industries. We talked about the famous negotiations that cause a number of your partners to suffer. Deadline this weekend. Here is what the president of the dairy industries says about it, and here is the appeal he launched to the entire distribution sector, listen.
President of the Dairy Industry
1:11 ↗
It's more than tense, it's of unprecedented brutality and we have observed two phenomena that are very worrying for us. The phenomenon of non-respect, let's say, of the agricultural raw material that we normally pass on from the producer from whom we buy the milk to the distributor, which should not be called into question, except that it is being challenged. And the other very worrying phenomenon is a phenomenon of legislative evasion, let's say, by European purchasing centers that circumvent the rules of EGalim and force us to sign contracts in Brussels, the Netherlands, or Madrid.
Alexandre Bompard, how do you react to this rather bleak picture painted by someone with whom retailers work?
Unfortunately, the representative of the Dairy Federation makes two mistakes. First, we respect the agricultural raw material as soon as we know it. When we are told the price of the agricultural raw material, I do not negotiate it. I don't even have the right to negotiate it. I just ask for it. That is, I want transparency and for the industrialist – because between me and the farmer there is always a processor – to communicate it to me. If he doesn't communicate it, it's more difficult. As soon as he communicates it, I do not negotiate it. Then he talks about purchasing centers. We have a center that negotiates with 45 large global multinationals: PepsiCo, Nestlé, Procter & Gamble. Among them, 42 have nothing to do with agrifood, two have to do with agrifood: Lactalis and Danone, which are not small players at all. And with that, the commitment we have made – we have a code of conduct that we have transmitted – is not to negotiate the agricultural raw material. In no case do we negotiate the agricultural raw material. That is the very principle of the EGalim law. Moreover, if I did not do it, I would be condemned. And since I am checked every year on not negotiating the agricultural raw material, every year, it is found that we do not negotiate the agricultural raw material.
Alexandre Bompard, this is not your first parliamentary inquiry or information commission or information mission on large retailers. How do you explain that year after year, you spend a lot of time with your colleagues, your secretary general notably, answering parliamentarians' questions about the retail sector, which is quite unique in the world. Only France calls the retail sector to account.
Yes, there are two great French peculiarities. First, we had to make 20 laws in 25 years to regulate commercial relations. To give you an idea, since I have the chance to be in about forty countries, generally in the other 39, there have been between zero and one law. Is it better in those countries? Yes. Are commercial relations more peaceful? Yes. Are farmers better off? Yes. But we still made 25 laws in 30 years. And indeed, I'm on my 7th – I say 7th because I'll soon be on my 8th commission. Yes. 7th in 8 years, and I have an 8th on March 25. As I said yesterday to the parliamentarian, I am always very happy to come and dialogue with them. What I find always a bit confusing – and I used the term yesterday – is this constant putting of the large retailers in the dock. Never do we ask what its role is, what it serves, whether it has difficulties. You've seen, we're going to talk about it, but do you have an explanation? Did the sector at some point not err? When we talk to salespeople, we realize that – I spoke yesterday by chance with someone, he said 'But it's horrible to talk to distributors, they are sharks and so on.' First, you're right. First, you're right when you have a situation like that, you always historically have a responsibility. I think we poorly explained our role, that we didn't communicate enough about what we were doing in the territories, about how we worked with the agricultural world. But it's a collective responsibility in the long term. After that, I think large retailers are the perfect scapegoat. You have agriculture that is in difficulty in many sectors, excess of standards, excess of costs, excess of law. And what does the minister of agriculture do before the start of the fair? We think: well, if I said that all that was because of large retailers. But farmers themselves don't say that. As you said, I'm going to meet them shortly. We have 300 partners in the agricultural world. We are the first partner of the agricultural world. I'm not saying the relationship is always easy, but the reality is that we are a long-term partner. When you listen to farmers right now, they don't talk about large retailers. In reality, they talk about standards, costs, laws, Mercosur, all these subjects. From time to time, they go to a Carrefour store or another and protest in a always picturesque way their discontent. That can happen, but it's not the core of their discontent, it's really not that. Their crisis is truly not that one. And so, indeed, it's the perfect scapegoat. We say to ourselves: well, the agriculture fair begins, I'm going to say there is violence, unacceptable behaviors, and all that is the fault of large retailers. I was saying yesterday to the chairwoman and the rapporteurs of the commission, I told them: but do you realize the groups I am dealing with, which I respect by the way, which are partners. They are international groups. Being international does not disqualify them. It's Coca-Cola, Pepsi Cola, Nestlé, Procter & Gamble. These people, by the way, when I talk to them, wonder why the French public authorities systematically take their side against players that are French. It's French regulation. Carrefour is French. Leclerc is French. Intermarché is French.
Alexandre Bompard, that's French regulation. That's French overregulation. You were trained at the National School of Administration. You left the civil service quite quickly to go into the private sector – I know, but there's no reason to be ashamed of it. But at the same time, the regulator state, you know what it is. The French state that regulates.
Yes, but I don't resign myself to the fact that in sectors like this, we don't realize that letting private actors do things works better. I told you: 25 laws in 30 years to arrive at the conclusion that it's always working worse. We have to stop. What I said yesterday: commerce is an activity of freedom. Freedom to choose an assortment, freedom to set a price, freedom to negotiate. It's only in France and in other regions that I don't think we want to resemble, that we have this desire to regulate everything deep down. From time to time, when I listen to some parliamentarians, I get the impression they would like to set prices themselves. But administered pricing doesn't work. There is only one country that implements it really with a lot of attention, that's Venezuela. 91% of people live below the poverty line. I don't think that's what we want for our country.
Alexandre Bompard, your sector has changed a lot in 30 years. Has the hypermarket model, which was talked about a lot in the 1960s and which revolutionized and created a global model, especially led by Carrefour, has it run its course? Knowing that today your growth is very tied to what is happening in urban environments.
First, thank you for reminding us. The reality is that this is a sector we exported all over the world. The French hypermarket has gone everywhere in the world. There aren't many sectors where France created something and exported it everywhere. Then this model changed. Today's hypermarket is not yesterday's hypermarket. It's a hypermarket that makes room for fresh produce, organic, short supply chains. It has changed enormously, especially with e-commerce. So today's hypermarket does not resemble yesterday's hypermarket. And then regarding Carrefour, we have developed growth formats: proximity formats in rural areas, urban areas, in train stations and airports. We have e-commerce developing very well, Carrefour Market, in short, all sorts of new formats that complement the hypermarket, which still has its role – it is the place of choice and price – but which must be and is being reinvented. It's true that your growth today is the Carrefour City in city centers, which have doubled their turnover. That's what drives growth. Last year, we opened nearly 500 stores in France in proximity formats. In Spain, we open many. In many countries, we open them because it's a format we master well. It's a format that corresponds to the structure of families today, and so we develop them effectively.
