The “grand soir” on price transparency in La Réunion will have to wait a bit longer. In 2022, consumer prices in this overseas department in the Indian Ocean were on average 9% higher than in mainland France, with food costs being 37% higher. The members of the Price, Margins, and Income Observatory (OPMR) admit to facing numerous difficulties due to the relative opacity of the retail sector on the island. The OPMR’s goal of achieving greater transparency in price formation seems out of reach for now.
The independent organization created to study the cost of living in overseas territories unveiled an interim report on its analysis of price formation for a panel of 21 products. Members of the observatory questioned the leaders of six out of seven major retail chains on the island. Three of these chains represent 80% of the sector’s total revenue of 2.5 billion euros, with the supermarkets and hypermarkets of the Bernard Hayot Group holding a leading position. One chain refused to respond, while the other six did not provide all the requested documents, leaving many areas of ambiguity.
In response to the lack of transparency, the OPMR has proposed five strong measures to increase transparency, acting as a form of pressure on the distributors. These proposals include enforcing the legal obligation – which is not currently followed – for the communication of financial statements of overseas companies, transmitting electronic data from cash receipts to INSEE for accurate surveys, and eliminating disputed back margins for consumer-benefiting invoice discounts. This more transparent and less inflationary mechanism aims to pressure distributors into more openness.
Coincidentally, this document comes at a time when several unions in La Réunion are calling for action against the high cost of living. As unions push for change, with some calling for similar mobilization as seen in the French Antilles, including demands for an end to high prices in supermarkets and other stores. Marie-Hélène Dor, the departmental secretary of the FSU teachers’ union, urged for action against abusive prices in retail stores during a recent demonstration. There is a growing sentiment that changes are needed to combat the high cost of living on the island.
Ultimately, the transparency and accountability of retail chains in La Réunion are being questioned by the OPMR and other stakeholders. The lack of response and incomplete information provided by major distributors has drawn attention to the challenges faced by the observatory in its efforts to understand and address the high price of goods on the island. With pressure mounting from unions and other organizations, there is a growing call for action to improve transparency and reduce costs for consumers in La Réunion. The OPMR’s recommendations aim to shine a light on the practices of distributors and push for changes that benefit consumers and promote fair pricing in the retail sector.
