“Egalim 3 is dead, all hail Egalim 4?”

Avocats, Conseils en réseaux

The last round of trade negotiations for 2024 was not yet over, when the Prime Minister requested two members of the French Parliament to “study the possibility of making appropriate changes to the current legal framework“.

And that was all it took for the protagonists involved to see this as the advent of what is already known as Egalim 4.

On February 22, the Prime Minister entrusted the Charente-Maritime and Essonne deputies with an ambitious mission.

They have been tasked with simplifying the rules applicable to commercial negotiation, without however going back on the stated and overriding objective of a balance in commercial relations and a better distribution of value in the agri-food sector.

In particular, the members of parliament will be asked to:

– re-examine the reasons behind the 2005 reform of the timetable for commercial negotiations: the timetable had already been particularly modified for the year 2024;

– Examine all mechanisms enabling price adjustments to be made during the life of a contract: this clearly concerns automatic price revision and renegotiation clauses. These clauses – which the Commission d’Examen des Pratiques Commerciales (CEPC) has been asked to review by the end of the 1st quarter of 2024 – appear difficult for suppliers and distributors to implement;

– Consider relaxing the rules on contract duration, in order to smooth relationships between suppliers and distributors in the current context of high price volatility;

– Formulate proposals for adjustments to the measures introduced by Egalim 1, 2 and 3, without of course altering the framework of the Egalim arsenal: it is this part of the mission that has crystallized the greatest amount of speculation. Following the example of the provisions of the Egalim 3 law of March 30, 2023, we can therefore quite naturally expect adjustments to the mechanisms in force;

– Reflect on the mechanisms required, particularly in view of the challenges of sustainability and the need to promote healthy, sustainable diets: the resale-at-loss threshold and promotions had already been tightly controlled by the previous components of the Egalim arsenal. If the parliamentary mission deems it appropriate, other mechanisms such as margin controls could be introduced here;

– Identify all possible avenues to simplify the framework for negotiations, in order to facilitate their finalization.

The time allotted for the completion of such a mission is relatively short, since the conclusions of the parliamentary mission will have to be delivered before the end of the first semester 2024.

This timing suggests that a new reform should be in place by the end of the year, and applicable from the 2025 negotiations.

To be continued!

Avocats, Conseils en réseaux

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