France: 2024 trade negotiations – reminder of the new timetable

published on 5 December 2023 | reading time approx. 2 minutes

Law no. 2023-1041 on emergency measures to combat inflation in consumer goods was promulgated on 17 November 2023, and published in the Journal Officiel on 18 November 2023. The aim of this law is to enable consumers to benefit from January 2024 (instead of 1 March), from price reductions on mass-market products due to the current deflation of certain agricultural raw materials.

To this end, this law provides for the advancement of commercial negotiations for all agreements concerning mass-market products marketed on French territory concluded for the year 2024 between any distributor carrying on a predominantly food retailing activity and any mass-market products supplier:

For suppliers with sales of less than 350 million euros excluding tax, consolidated or combined where applicable, in their last financial year:
- Sending of the supplier’s general terms and conditions by 21 November 2023;
- Conclusion of the written agreement by 15 January 2024, to take effect no later than 16 January 2024;
For suppliers with sales of 350 million euros excluding VAT or more, consolidated or combined where applicable, in their last financial year:
- Sending of the supplier’s general terms and conditions by 5 December 2023;
- Conclusion of the written agreement signed by 31 January 2024, to take effect no later than 1 February 2024.

Ongoing agreements signed before 1 September 2023, will automatically terminate on 15 or 31 January 2024, depending on one of the cases above.

This law, which only concerns the written agreements provided for in articles L. 441-4 ("mass-market products" agreement) and L. 443-8 ("food products and petfood" agreement) of the French Commercial Code, when they are concluded with a distributor carrying on a predominantly food retailing activity, does not change therefore the timetable for commercial negotiations for other written agreements, which must be concluded before the deadline on 1 March 2024. Regarding retailer brand products, it is reminded that they are not subject to the negotiation and formalization framework applicable to own-brand products.

Suppliers of mass-market products (including food products and pet food) affected by this new timetable will need to pay close attention to the deadline for sending their general terms and conditions (next deadline: 5 December 2023, for suppliers with sales of 350 million euros or more), subject to an administration fine of up to 75,000 euros for an individual and 375,000 euros for a legal entity.

In addition, the fines applicable in the event of failure to meet the new deadlines (15 or 31 January 2024) have been reinforced by the law of 17 November 2023, which stipulates that such failure is punishable by an administrative fine of up to 200,000 euros for an individual and up to 5 million euros for a legal entity.

Lastly, the new law stipulates that, within three months of the law's promulgation (i.e., by 17 February 2024), the Government must submit a report to Parliament assessing the effects of progress in trade negotiations on the selling prices of mass-market products and on the sharing of value between the various economic players. It will be interesting to examine this report in due course to assess the effectiveness of the new timetable.