First sanctions since the application of the “Food law”. Carrefour, Système U and Intermarché together received an administrative fine of more than 4 million euros for irregularities during commercial negotiations with suppliers to the food industry.
Carrefour was the most heavily penalized with a fine of 2.93 million euros. System U was hit with 1.14 million and Intermarché with 211,000 euros, said the Directorate General for Competition, Consumption and Fraud Prevention (DGCCRF).
Delays in signing annual agreements
"The rule setting a deadline of March 1 for the signing of annual agreements had not been respected for a significant number of suppliers", specifies the DGCCRF. "The amount of the penalties is proportional to the number and extent of the delays, as well as to the forecast turnover concerned".
Commercial negotiations between distributors, farmers and manufacturers are held from mid-October to the end of February and are to establish the prices of the products placed on the shelves for the coming year. However "the fact of not having signed the convention within the time limits is likely to reinforce the balance of power in favor of the distributor", notes the administration, which claims some "5.500 controls on the application of the new rules framing promotions ”, Provided for under the Egalim law, or“ Food law ”.
Getting out of a domino effect
Promulgated in October 2018, this law aims in particular to get out of a domino effect caused by the price war between the four big distributors in France. During negotiations, the latter demand ever lower prices from suppliers to the food industry, who in turn buy the agricultural raw material as cheaply as possible from farmers.
A year ago, the government insisted on "the persistence of very questionable practices", especially in the mass distribution, during trade negotiations. The Minister of the Economy Bruno Le Maire had then warned that Bercy would ensure the "rigor of the controls carried out" at the distributors, and had called to "punish the failings".
Will the actors play the game of reform?
"The negotiations which will end on March 1, 2020 will be, even more than the previous ones, an indicator of the will of the actors to play the game of the reform", for its part warned the DGCCRF in its press release. Last October, the Egalim law had been harshly criticized by the consumer association UFC-Que Choisir and by the Confédération paysanne, who estimated that a year after its entry into force, "the rebalancing of trade negotiations long awaited by farmers and promoted by law did not take place ”.
Joined by AFP, the Carrefour group was unable to react immediately. The Système U and Intermarché groups could not be reached.
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