BQP - VALUE FOR MONEY
Definition
The BQP, or "Quality-Price Shield," is a program launched in France in 2012 in the overseas territories and communities to combat the high cost of living.
It takes the form of an annual agreement between government authorities and major retailers, establishing a list of everyday consumer goods for which prices are capped or moderated.
For the distributors concerned (the French West Indies, French Guiana, Réunion, and Mayotte), the BQP is both a regulatory requirement and a tool for price positioning.
Why it's important
- Price controls on essential goods: covering more than 100 items (basic food, hygiene products, school supplies) in areas with lower purchasing power.
- To provide a framework for collective bargaining: for retailers in their dealings with suppliers and government authorities, rather than being subject to unilateral decisions.
- Maintaining consistency between brand image and pricing: between national brands and their overseas variants.
A concrete example
Let's take the example of a major retail chain based in Guadeloupe.
The prefect, in consultation with retailers and suppliers, establishes a “Quality-Price Shield” consisting of 120 everyday consumer products (food, hygiene, household cleaning, etc.) for a maximum total of €340, including tax.
The retailer is free to set the price of each product, provided that the total amount of the shopping cart never exceeds 340 €.
If the purchase price of the oil increases by €0.30, the retailer can choose to:
- to slightly reduce its margin on this product;
- to lower the price of other items in the shopping cart;
- to renegotiate certain costs with its suppliers.
The goal is to stay within the overall budget while minimizing the impact on the brand's profitability.
How to measure/use it
The calculation is very simple.
It involves adding up the price (including tax) of each item in the shopping cart.
Formula:
BQP Amount = Sum of the prices (including tax) of all items in the shopping cart
For example:
- Milk: €1.15
- Rice: €2.05
- Oil: €3.40
- Pasta: €1.25
- Toothpaste: €2.90
- Laundry detergent: €8.95
- ...
- Total for all 120 items: €338.70
The basket is in compliance because its total amount remains below the regulatory limit of 340 €.
On the other hand, if the total comes to €342.50, the retailer will have to adjust the prices of certain items in order to bring the total back below the authorized threshold.
Mistakes to Avoid
- Confusing BQP with a promotion: A BQP product is not on sale; it is a price negotiated for the entire year. Removing it from the program or re-promoting it violates the agreement.
- Ignoring consistency with other listings: a BQP product priced at €2.89 next to a similar non-BQP product priced at €2.79 creates confusion for customers and undermines the program.
- Underinvesting in communication: A BQP that isn't visually identified in-store loses most of its image-price impact.
Frequently Asked Questions
The Quality-Price Shield (BQP) is a program designed to guarantee consumers access to a basket of essential products at controlled prices. Implemented in several overseas territories, it is based on an agreement between government authorities, retailers, and suppliers to limit the cost of living while maintaining a defined level of quality.
The BQP primarily covers a basket of consumer goods: food, personal care, household cleaning, and products for families. The composition of the basket may vary by region and depending on the agreements reached each year among the various stakeholders.
The BQP requires retailers to adhere to price caps on a select group of products. Pricing teams must therefore adjust their strategy to maintain overall profitability by balancing the products subject to the policy with the rest of the product lineup, while maintaining a consistent price image.
Pricing management relies on close monitoring of purchase costs, margins, competitors’ prices, and changes in sales volumes. Pricing solutions make it possible to simulate different scenarios in order to comply with regulatory requirements while minimizing the impact on the retailer’s profitability.
Yes. The Quality-Price Shield is a program specific to France’s overseas territories, where it addresses challenges related to the cost of living. Although it does not apply in metropolitan France, it serves as a concrete example of pricing under regulatory constraints, requiring rigorous governance and ongoing trade-offs.
The BQP is part of the broader challenge of measuring a retailer's price-image, and has become an indicator closely monitored by retailers.
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