How large retailers are relocating their purchases to bypass EGalim

More and more brands are joining purchasing centers based abroad to negotiate prices with their suppliers.

How large retailers are relocating their purchases to bypass EGalim

More and more brands are joining purchasing centers based abroad to negotiate prices with their suppliers. A way to circumvent French law?

Since 2014, major retail brands like Carrefour, Leclerc and Super U have joined forces in purchasing centers to pool their orders and buy cheaper in large quantities. But recently, certain brands are choosing centers abroad and joining forces with other European brands to conduct negotiations across several countries. What happens to the EGalim law in all this?

The EGalim law is this French legislation which gives weight to producers in negotiating prices with the agroindustry and mass distribution. Its circumventions are the heart of the anger of the agricultural world. By outsourcing its negotiations abroad, is mass distribution trying to avoid French rules? The brands deny this and simply speak of their desire to keep prices competitive on the European market.

Thus, in 2016, E. Leclerc joined the Eurelec Trading purchasing center, based in Brussels, which he now shares with a German group and a Dutch group. Carrefour has joined the Eureca platform in Madrid, which trades for six European countries. All claim to use these platforms mainly to negotiate with large international suppliers, as well as with some large French agroindustrial groups such as Danone or Lactalis.

But according to Boris Ruy, associate lawyer at the Fidal firm, interviewed by Le Monde, these negotiations now also concern “smaller industrialists, who until now did not have the profile”. Therefore, “what law should apply in the context of these negotiations outside our borders?” Interviews Nicolas Genty, lawyer and founder of Loi law firm

The question was debated in the Senate on Thursday, February 1: centrist senator Anne-Catherine Loisier denounced these delocalized platforms which, according to her, would allow large-scale distribution "to free themselves from the framework of negotiations defined by the EGalim and impose constraints that are sometimes abusive for suppliers under French law.

On Wednesday January 31, the Minister of the Economy Bruno Le Maire announced that he would “launch specific controls on European purchasing centers to ensure that there is no circumvention (…) of the rules of the EGalim law".

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