In full commercial negotiation, Michel-Edouard Leclerc adds fuel to the fire. In a series of tweets, the head of the distribution group accuses the deputies of having given in to the industrial lobby.
What is Michel-Edouard Leclerc referring to in these tweets that denounce collusion between elected representatives of the national representation and industrial lobbies?
He refers here to a bill presented at the end of November by the Renaissance deputy for Val-de-Marne Frédéric Descrozaille which is based in particular on another proposal by Julien Dive, elected Les Républicains de l’Aisne.
This text entitled “Securing the supply of the French with consumer products and ensuring the future of products made in France” includes four articles that aim to expand and complete the current Egalim law governing promotions and resale thresholds at a loss . These frameworks planned from the beginning on an experimental basis must end on April 15, 2023.
Manufacturers set their prices
If the law were to be extended a priori, the deputies then wish to strengthen it. This makes Michel-Edouard Leclerc and representatives of the distribution sector such as Jacques Creyssel, the head of the Federation of Commerce and Distribution (FCD), fear that it will institutionalize inflation.
How? It is article 3 of the bill that poses a problem for distributors. It establishes that “in the absence of an agreement on March 1, any order placed by the distributor is made on the basis of the price list and the general conditions of sale in force.” These general conditions, when decided by the manufacturers, would therefore mean that the brands would be forced to accept significant price increases.
Until now, if an agreement could not be reached before the end of negotiations, distributors could, with prior notice, extend the purchase prices negotiated during the previous year while a new agreement was reached.
If this extension is acceptable outside the inflation period, when energy costs soar as they have been for a year, maintaining the same sales conditions could endanger many manufacturers.
Therefore, the new measure proposes giving power to manufacturers who propose to increase their prices between 10 and 30% depending on the product.
“Nestle-Coca-Cola Proposal”
This measure includes the recommendations of the Institute for Linkage and Studies of Consumer Industries (Ilec) which brings together the majority of the main manufacturers of consumer goods and which welcomes the initiative.
Another provision in the proposed law upsets dealers. Indeed, Article 1 explains that “all the provisions relating to this title apply to any commercial relationship from the moment the products or services in question are marketed on French territory. Any clause to the contrary shall be deemed unwritten.”
That is to say, it does not matter that the products have been purchased and the prices negotiated in purchasing centers located abroad. A widespread practice among dealers that allows them, in particular, to circumvent French law for a part of their purchases.
From now on it will be the place of sale of the products (in this case France) that will be the criterion for applying the law. A measure that seems incompatible with the rules of the single European market.
The skeptical government
But do these provisions have any chance of success? The text will be discussed in a public session starting on January 16. Discussions are expected to continue for several weeks. However, the government decided on December 21 to start an accelerated review procedure to reduce the parliamentary shuttle.
However, on the side of the Delegate Minister of Commerce Olivia Grégoire, there is no support for the text. Although the government has been waiting for months for inflation to come down, these new measures could relaunch the rise in consumer prices, which reached a record 12.6% last December.
To show their goodwill, the distributors signed a constitutive act last December in which they agree to accept price increases linked to energy only for SMEs in the food sector.
A way to convince the Minister of Commerce to bury the controversial text.
Source: BFM TV
