The objective is to support producers and industrialists in their often tense relations with large retailers. A bill regulating promotions, purchasing centers located abroad or pricing rules in the event of disagreement between producers and distributors was definitively adopted on Wednesday March 22 by Parliament.
After the Senate the day before, the National Assembly unanimously validated a series of measures tackling the “structural imbalance” between on the one hand, the suppliers, and on the other, the big buyers like Leclerc, Carrefour or Intermarché, whose price war pulls the margins down.
The text, carried by the deputy Renaissance Frédéric Descrozaille, is strongly criticized by the large distribution, which accuses him in particular of limiting their possibilities of proposing strong promotions.
The law “Overall going in the right direction”greeted the Minister of Agriculture Marc Fesneau in the hemicycle, believing that he was going to allow a “better sharing of value for the benefit of our farmers”.
The text aims in particular to dispel the “legal vagueness” existing in the event of failure of the annual commercial negotiation between suppliers and distributors, to fix the prices of the products which fill the shelves. Currently, if suppliers and distributors do not agree, their contract is not interrupted. A favorable situation for supermarkets, which can continue for several months to order products at the old price, even though the supplier may be faced with an increase in its production costs.
From now on, in the event of failure of the negotiation and on an experimental basis, the supplier will have the choice: to interrupt deliveries to the stores or to apply a notice of rupture “classic”taking into account market conditions, such as inflation.
Increase in the threshold for resale at a loss
Marc Fesneau hailed the “increased administrative fines” when the negotiation deadlines are not respected, “in order to fight against the practices of certain distributors who are tempted to play for time to put pressure on producers”.
The law also extends until 2025 the experiment in the supervision of “threshold of resale at a loss” for food products. Fresh fruits and vegetables, initially concerned, were excluded as the text was examined. Consumer associations demanded the suspension for all food products of this criticized measure, which expired in April. It obliges supermarkets to sell food products at least 10% more expensive than the price at which they bought them.
Another sticking point: the 34% cap on promotions “shocks” on non-food products, judged “irresponsible and inflationary” by the employers’ federation of large retailers, the FCD. “The consumer will once again be penalized: these products (detergent, scouring powder, deodorant, dishwasher tablets, shampoo, combs and other curlers) are among the most expensive in customers’ shopping carts”had thundered Tuesday on his blog the president of the strategic committee of the Leclerc centers, Michel-Edouard Leclerc.
“The price should not be the cheapest but the fairest »
This last, “with big publicity stunts, try to explain to us that he is the anti-inflation Mr., quipped Modem MP Richard Ramos. But “the price should not be the cheapest but the fairest”he pleaded, believing that the law allowed “our food industry to always be able to produce quality”.
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The Minister of the Economy, Bruno Le Maire, for his part said he was in favor of distributors being able to “make promotions not just at 34% on shampoos, hygiene products, detergent products but up to 50%”. Deputies and senators, however, maintained the ceiling they had agreed on, but finally agreed to postpone its entry into force until 1er March 2024.
Another provision decried by the major brands submits negotiations with European purchasing centers to French regulations, when the products concerned are intended for the French market.
A response to the creation by certain distributors of power stations abroad aimed at negotiating, according to MP Descrozaille, with “legal provisions (…) less protective of the interests of French farmers and products made in France”.
To protect farmers, the text also provides for a “non-negotiability of agricultural raw materials” in products sold under private label.