The Autorité analyses the causes of the high cost of living in Martinique and makes 9 recommendations
On 29 January 2025, the French government requested an opinion from the Autorité de la concurrence on the margins of wholesale importers and distributors within Martinique’s food distribution chain. The request was made in the context of the island’s high cost of living: according to INSEE data, prices in Martinique were 13.8% higher than in mainland France in 2022 (Fisher index), rising to a 40% difference for food products.
In response to protests by the local population, in October 2024, the French State, the territorial collectivity of Martinique (CTM) and various stakeholders in Martinique signed an agreement to combat the high cost of living on the island (Protocole d’objectifs et de moyens de lutte contre la vie chère, the “Protocol”). Among its measures, the Protocol provided for the French government to request an opinion from the Autorité de la concurrence, with the aim of increasing transparency around the prices and margins of wholesale importers and distributors.
In its opinion, the Autorité begins by noting that consumer price disparities between mainland France and Martinique remain high and appear to be widening. It also notes that, while existing tools to combat the high cost of living – the Price, Margin and Revenue Observatories (OPMR), the various versions of the price-quality shield (BQP, BQP+) and the adoption of the Protocol – remain useful, they are insufficient. In particular, it highlights the lack of resources available to OPMRs to fulfil their mandates. The Autorité has therefore issued a set of recommendations to address these issues (recommendations 1 and 2).
Secondly, as noted in its previous opinions (09-A-45 of 8 September 2009 on import and distribution mechanisms for consumer goods in the French overseas territories and 19-A-12 of 4 July 2019 on the functioning of competition in the French overseas territories), the Autorité reiterates that the persistent significant price differences between Martinique and mainland France are the result of multiple, ongoing structural and other factors. Lastly, the Autorité analyses the margins of wholesale importers and integrated distributors operating on the island.
Persistent structural factors behind the high cost of living in Martinique
The specific characteristics of Martinique’s economy, including the small size of the market, an unbalanced trade situation with heavy reliance on mainland France for supplies, the impact of local taxes (VAT and dock dues) and high forwarding costs, largely explain the island’s high consumer prices. The Autorité makes a series of observations and issues several recommendations in this regard (recommendations 3 to 6).
Analysis of margins in the food distribution chain
Based on the data collected and analysed, the Autorité considers that the margins achieved by wholesale importers and integrated distributors operating in Martinique are broadly comparable to those observed in mainland France.
Concerning wholesale importers, the cornerstone of supply in Martinique, the Autorité observes that several exclusive import agreements may persist despite the Lurel Law, which has prohibited such agreements since 2012. It therefore recommends strengthening the oversight of the Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) in this area and increasing its resources (recommendation 7). Furthermore, the Autorité recommends that, as wholesale importers’ margins appear higher than those of distributors, wholesale importers should be more closely involved in measures to combat the high cost of living (recommendation 8).
Concerning the margins of integrated operators, the Autorité regrets the lack of available information, in particular on how their accounting results are restated, and highlights the difficulty of isolating performance across the entire value chain.
Accordingly, the margins of distributors and wholesale importers should be interpreted with caution, in particular in view of intra-group invoicing, which allows the total margins associated with the import and distribution of products in Martinique to be allocated among the different entities within a group.
To reduce this opacity, the Autorité recommends establishing a permanent and binding framework for collecting such data, so that public authorities can monitor, on an ongoing basis, the evolution and structure of the prices and margins of wholesale importers and distribution groups in Martinique, in particular their internal allocation (recommendation 9).