Demonstrations in Martinique: why such price differences with France?

Looting of businesses, fires of public buildings or even blocking of highways… since the beginning of September, Martinique has been in the grip of a mobilization against the high cost of living which has degenerated in recent days with several outbreaks of urban violence.

During the night from Wednesday to Thursday, 26 police officers and gendarmes were injured, prompting the island’s prefect to decree a new curfew and a ban on demonstrations throughout the territory until Monday. The next day, eight people were arrested after around a hundred people invaded the runway at Fort-de-France airport on Thursday.

Food prices particularly affected

At the origin of these demonstrations, a movement launched this summer on social networks by the Rally for the Protection of Afro-Caribbean Peoples and Resources (RPPRAC), a Martinique association demanding the alignment of the prices of food products with those practiced in France.

If the theme of high cost of living is not new on the West Indian island, the situation has in fact deteriorated under the effect in particular of the inflationary crisis. According to INSEE, price gaps with France have widened significantly in recent years: they went from 9.7% in 2010 to 12.3% in 2015 and up to 13.8% in 2022.

Food prices are particularly affected with price differences which today reach 40% (compared to 38% in 2015), proof if any were needed that the various price protection mechanisms – such as the Lurel law of 2012 which established a sort of permanent promotion on a set of everyday consumer products – have never succeeded in bearing fruit.

Geographic distance

There is no shortage of explanations. Beyond the inflationary situation, Martinique prices suffer from the geographical distance from mainland France, their weak integration into regional markets and therefore their dependence on French imports (60% of food products, on average, according to the INSEE).

This is one of the legacies of the colonial economic model based on a principle of exclusivity with the metropolis and centered on exports to the detriment of local production. The average cost of maritime transport, increased by the multiplicity of actors responsible for transport (up to 14 for an import from the Antilles) and the resulting accumulation of margins, was evaluated by a parliamentary report to 7.2% of the purchase cost.

Above all, local markets are narrow and very unequal with a majority of the population who, in mainland France, would be considered to be living below the poverty line, and a minority with very high incomes, in particular the body of civil servants benefiting from excess remuneration of 40%.

Large distribution in a monopoly situation

Having a quasi-monopoly situation, large retailers can therefore freely increase their margins on non-BQP products by targeting this easier demand. «It is logical that operators primarily target this part of the population capable of paying. In absolute terms, when we talk about the cost of living, it means nothing, we are in fact facing a problem of income inequality», summarizes Olivier Sudrie, economist at Paris-Saclay and overseas specialist.

The question of reform, or even the elimination of this excess remuneration with inflationary consequences – but which also stimulates the economy – is part of current debates.

Sea dues in the sights of distributors

On the distributors’ side, it is easier to blame tax reasons and in particular the dock dues, a customs duty on imported products inherited from the colonial period.

Theoretically conceived as a financing tool for local authorities – it represents a third of their budget on average – and as a protectionist measure for the local industrial fabric, this tax has the effect of increasing the cost of most imported products. An influence which is, however, the subject of lively debate among politicians and economists.

In response to the mobilization, the local authority of Martinique (CTM) announced at the end of September and for 36 months “an exceptional system aimed at eliminating dock dues rates (…) on 54 families of essential products, representing more than 5,900 essential items.” Not enough to calm the anger of the demonstrators, who continue to demand alignment with France in the prices of food products

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High cost of living and poverty in overseas territories

The price gap between overseas departments and France oscillates between 9% (in Reunion) and 16% (in Guadeloupe). All sectors are concerned, from food products to health expenses (16 to 17% more expensive in Mayotte, Guadeloupe and Guyana) including telephone bills (35 to 37% more expensive in Guadeloupe, Guyana, Martinique) .

The average price gap increased between 2015 and 2022. It went from 12.5 to 15.8% in Guadeloupe, from 12 to 14% in Martinique, from 7.1 to 8.9% in Reunion, and even from 6.9 to 10.9% in Mayotte.

In 2017, the date of the last INSEE study, the median living standards of Martinique and Guadeloupe were respectively €1,310 and €1,360.which is 20 and 23% lower than that of mainland France (€1,700). This is still significantly more than the median salary in Reunion (€1,160), Guyana (€920) or even Mayotte (€260).