According to the office of Olivier Véran, government spokesman, this provision "will be included in the bill" advancing commercial negotiations between supermarkets and their agribusiness suppliers to be "presented in early October" by the government.

The Minister of Energy Transition Agnès Pannier-Runacher said Sunday evening on BFM count on a vote "in November" of this measure to give "a degree of additional action" to fuel distributors.

. What does the law say today?

Resale at a loss has been prohibited in France since 1963. Traders can not "resell or announce the resale of a product in the state below its actual purchase price," explains on its website the Suppression of fraud (DGCCRF).

In 2018, the third largest French food retailer, Intermarché, was forced to pay a transactional fine of 375,000 euros - the maximum amount incurred for resale at a loss - for marketing Nutella at a very discounted price. The promotional operation had led to scenes of jostling and fights that had marked the spirits.

The DGCCRF lists some exceptions: cessation or change of commercial activity, end of season - during winter or summer sales -, "technical obsolescence or obsolete products", or if the products are "threatened with rapid alteration".

. Why such a ban?

Originally, the ban was intended to protect the most fragile professionals from any threat of "dumping": the risk was that the larger and more solid businesses would suffer losses while their more fragile competitors, exhausted by the lower prices, disappeared, leaving them free to practice the pricing policies of their choice.

In 2012, Emmanuel Combe, who was then vice-president of the French Competition Authority, also explained on the Atlantico website that resale at a loss could only be a decline "in trompe l'oeil", the trader compensating for selling at a loss on one product by increasing its margin on others. The benefit of the transaction for the consumer would thus be cancelled.

. What consequence for the little ones?

The one who is now professor of the Universities at Paris 1 Panthéon-Sorbonne, professor affiliated to Skema Business School and consultant for the communication agency Image 7, nevertheless considered that these pitfalls were "quite irrelevant" concerning fuel, especially because most independent service stations have disappeared.

Francis Pousse, president of the professional union Mobilians representing 5,800 service stations outside supermarkets, however, expressed his indignation to AFP, reacting to Elisabeth Borne's announcement. "My members live on 40, 50% or more from the sale of fuel, so if they sell at a loss, I give them three months."

He also said he was "sceptical" about the beneficial effect of this measure on purchasing power, because if the prices of supermarket suppliers continue to rise, the latter will not be able to "afford to lose 15 cents on each liter of gasoline".

. Can the measure lower prices?

In recent months, many distributors have been selling fuel at cost. But the sector generally makes petrol and diesel a popular product, taking on their distribution only small margins. In this context, the cost price only slightly lowers the price charged to the customer at the end of the chain.

According to Sylvain Bersinger, chief economist at Asterès, "root causes" explain the rise in fuel prices, such as the rise in the price of a barrel and the slight depreciation of the euro against the dollar "which has increased the price of oil".

For him, selling at a loss "could generate perverse effects". It recommends instead "targeted aid to households most impacted by the rise in fuels".

With a sale at a loss allowed, Emmanuel Combe estimated in 2012 quite possible to imagine "aggressive, temporary and local price reduction strategies on the part of some distributors", which could have real consequences on the price charged to the customer. At the risk of perhaps seeing the same scenes reproduced as when Intermarché broke the price of Nutella.

© 2023 AFP