Ophélie Artaud / Photo credit: JEAN-FRANCOIS MONIER / AFP 16:29 pm, September 18, 2023

On Monday, Economy Minister Bruno Le Maire announced that the sale of fuel at a loss will be authorized from "early December" and for a period of six months. A practice that has been banned since 1963. But what is selling at a loss and why is it prohibited in shops in France?

The sale of fuel at a loss will be authorized from "early December" and for a period of six months, announced Monday the Minister of Economy Bruno Le Maire. A way to cope with the rise in the price of gasoline, which flirts with 2 euros per liter in many gas stations. However, this practice has been banned since 1963. But why?

What does the law say?

First of all, as indicated on the website of the Directorate-General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF), "it is forbidden to resell or announce the resale of a product in the state below its actual purchase price, a concept that determines the threshold for resale at a loss".

The only exceptions are when sales are forced by "the cessation or change of a commercial activity", at the "end of the season", in the event of "technical obsolescence or obsolete products", if the "replenishment is down", in the event of "alignment with a lower price legally practiced in the same area of activity", when the products concerned are "perishable and threatened with rapid deterioration" or for "discounted products".

>> READ ALSO - Fuel: Why pump prices should not fall before the end of the year

In case of non-compliance with these rules, traders risk a fine of up to 375,000 euros. The Intermarché brand has also paid the price, after selling jars of Nutella at -70% in 2018, causing scenes of riots in several stores.

Why was this ban put in place?

Selling at a loss has therefore been prohibited since the law of 2 July 1963. The first hypermarkets arrived in France. Initially, this was put in place to protect small businesses from competition from larger brands.

The objective was to prevent large brands, by selling their products cheaper, from forcing small traders to do the same, while the latter would not have the means to hold on in the long term.

Will it change anything for motorists?

A priori, even if distributors resell at a loss, the drop in fuel prices should not be huge. The price of a barrel of Brent continues to rise, and the government has said it will not lower taxes on gasoline. Bruno Le Maire also opposed a new rebate of 10 or 15 cents on a liter of fuel, supported by the State, as had been put in place last year.

>> READ ALSO - Fuel prices: "Mr. Mayor, you are reaping a pactole", accuses Xavier Bertrand

We must therefore expect a drop of 1 or 2 cents at the pump. "A distributor that is not a producer, like Total, ultimately has very little margin on this. We are talking about one or two cents, depending on the fuel, margin. It is a decrease that is still quite small and that will not be enough for motorists, "explains to Europe 1 Fabrice Godefroy, expert mobility and environment for the association 40 million motorists.

It is also impossible to know which service stations will agree to sell at a loss, especially since such a measure could be difficult to implement for independent pump attendants. In the meantime, TotalEnergies has announced that it will continue its operation to cap the price of gasoline at 1.99 euros "beyond December 31, 2023".