Europe 1 with AFP 18:45 p.m., March 22, 2023A bill to strengthen producers and industrialists in their tense commercial relations with large retailers was definitively adopted Wednesday by Parliament, after a final vote by deputies. This is a series of measures to tackle the "structural imbalance".
Parliament on Wednesday adopted the bill of Renaissance MP Frédéric Descrozaille, which modifies on an experimental basis the commercial relations between supermarkets and their suppliers and could lead to further price increases in supermarkets. After the Senate the day before, the National Assembly unanimously validated (117 votes, none against) a series of measures aimed at tackling the "structural imbalance" between on the one hand, suppliers, and on the other, large buyers such as Leclerc, Carrefour or Intermarché. Europe 1 lists the main points of the text.
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Extend the ban on selling food at "cost price"
Since the first Agriculture and Food Law (Egalim, 2018), a provision aims to guarantee better remuneration for farmers by forcing supermarkets to make a margin of at least 10% on food products. The device is known by specialists as "SRP10", for resale threshold at a loss +10%. The aim is to prevent distributors from being tempted to exert additional pressure on manufacturers and, consequently, on producers by excessively tightening their margins.
The 10% margin provision, which was due to end in the spring, has been extended until 2025, except for fresh fruit and vegetables. Its effectiveness has been questioned by parliamentary work but it remains crucial in the eyes of the first agricultural union, the FNSEA.
According to UFC-Que Choisir, consumers are the main losers of this provision. A Senate Commission had estimated that promotional operations at cost price could have represented 600 million euros in potential savings each year for customers of supermarkets.
Protecting farmers' incomes
The cost of agricultural raw materials (meat, milk, etc.) can no longer be negotiated for private label products, properties of supermarkets (Reflets de France, Marque Repère, Brand U for example). This was already the case since 2021 for so-called national brands (Danone, Bonduelle, Fleury Michon...). The objective is also to protect farmers' remuneration, which was often seen as an adjustment variable in negotiations between supermarkets and manufacturers.
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Limit promotions on non-food products
Another measure voted on Wednesday: the supervision of promotions on "DPH" products, drugstore, perfumery, hygiene, maintenance. Diapers, shampoo, cotton pads, make-up and other razors can no longer be discounted above 34%. However, the measure will not come into force until March 1, 2024. This time, it is about protecting the revenues of the manufacturers of these products. According to Ilec, which represents them, supermarkets with less latitude to negotiate on food products are inclined to catch up in this segment.
According to industry experts, the measure will also weigh on the purchasing power of consumers who often buy these products during promotional operations, taking advantage of discounts well above 34%.
Giving more weight to manufacturers in the face of supermarkets
The Descrozaille bill also aimed to fill the "legal vagueness" in the event of failure of annual commercial negotiations between supermarkets and their suppliers. Until now, if supermarkets and manufacturers did not agree on new tariffs, the former could still order at previous rates even if production costs had risen in the meantime.
From now on and on an experimental basis, the supplier may take the initiative to interrupt deliveries to stores immediately or after a certain period. Another point favourable to manufacturers is a cap on the amount of logistics penalties, which supermarkets impose on them when they are not delivered on time or correctly. Supposed to avoid shelf breaks, they have sometimes been "diverted from their purpose" to constitute additional income for supermarkets, had castigated the government.
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Better supervision of European central purchasing bodies
The text also aims to better regulate the activity of central purchasing bodies that distributors have set up in recent years in other European countries (Belgium, Spain, etc.) and which are sometimes used to negotiate more advantageously, avoiding French regulations. With this new text, French rules will apply to "all" of their commercial relations as long as "the products concerned are marketed on French territory".