France accuses Germany of 'wage dumping' in the meat sector

PARIS Tue Oct 22, 2013 1:20pm BST

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PARIS (Reuters) - France accused Germany on Tuesday of helping to cause a crisis in the French meat sector with unacceptable "wage dumping".

Paris has been under pressure to react after Gad, a pork slaughterhouse and packing firm in Brittany, the centre of France's pork and poultry production, said this month it would lay off or transfer close to 900 workers.

The poultry giant Doux had to lay off about a thousand people in Brittany last year after being declared insolvent and its main competitor Tilly-Sabco, which employs 340 people, cut output by 40 percent at the start of the month.

"If our slaughterhouses close one after the other, it is also because Germany hires employees paid 400 euros a month," Industry Minister Arnaud Montebourg told the daily Le Parisien.

"The question of German wages is a real problem," he said. "Wage moderation is fine, but unfair wage dumping is not acceptable."

France's meat industry says its German competitors can hire abattoir workers cheaply from Eastern Europe while French employers are saddled with a legal minimum wage.

French employers' hourly gross labour costs, including social security contributions, averaged 34.2 euros in 2012 against 30.4 in Germany, according to Eurostat. In Romania and Bulgaria, two countries that send a large number of workers to Germany, they averaged 4.4 and 3.7 euros respectively.

France's gross minimum wage is 1,430 euros a month, including social security contributions, based on a 35-hour working week.

The German meat industry group BVDF said the problem lay with France, not Germany.

"Accusations of wage dumping have been coming from France for several years," said the BVDF's Thomas Vogelsang.

He said the structure of the French meat industry made it uncompetitive and was costing it market share, and that in parts of northern France where the criticism was particularly strong, there had been some form of state support for quite a time.

"There is a lot of protectionism in France," he said. "If wages there (in France) are so high, you have to ask why workers from eastern Europe come to Germany and not France."

Unlike France, Germany does not have a blanket minimum wage, although the Social Democrats are trying to push one through in talks with conservative Chancellor Angela Merkel to form a new coalition government.

(Reporting by Sybille de La Hamaide; Editing by Kevin Liffey)

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