French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

Since the Ordinance of 24 April 2019 , contracts between suppliers and distributors relating to the design and production of food products in ways that meet the specific needs of the buyer and sold under a private label are subject to particular formal requirements, if they are composed of agricultural products that have been the subject of a written agreement . The 2019 ordinance required the par …

Contractual formalities

Since the Ordinance of 24 April 2019 , contracts between suppliers and distributors relating to the design and production of food products in ways that meet the specific needs of the buyer and sold under a private label are subject to particular formal requirements, if they are composed of agricultural products that have been the subject of a written agreement . The 2019 ordinance required the parties to such contracts to include the price or the criteria and methods for determining the purchase price of the agricultural products that make up those food products.

The EGalim 2 Law  of 18 October 2021 reinforces the formal nature of such agreements in order to protect the remuneration of farmers. It supplements the legislation by specifying that the setting of prices must take into account the efforts of innovation implemented by the manufacturer at the request of the distributor. The EGalim 3 Law  of 30 March 2023 subsequently extended to private label products the rule that under no circumstances may price negotiations cover the manufacturer's share of the price of agricultural raw materials and processed products specified in Article L. 441-1-1.

In addition, the EGalim 2 Law required the inclusion of an automatic price revision clause based on changes in the cost of the agricultural raw material or processed products subject to section I of Article L. 441-1-1 of the Commercial Code, which are included in the composition of food products. The parties are free to determine the revision formula but must take into account, in particular, the indicators relating to production costs in agriculture cited in section III of Article L. 631-24 of the Rural and Maritime Fishing Code. The parties must also include a clause for the allocation between them of the various additional costs that may arise during the performance of the contract. Under no circumstances may expenses related to promotional transactions for a product sold under a private label be charged to the manufacturer.

The contract must also include a clause relating to the projected volume that the distributor commits to produce over a given period as well as a reasonable time period for the manufacturer to anticipate possible variations in volume . The contract must also establish a warning system and periodic exchanges of information between the parties in order to optimize supply conditions and limit the risks of disruption. Finally, it must define the minimum contractual notice period to be met in the event of termination of the contractual relationship and provide for the treatment and disposal of packaging and finished products in the event of termination of the contract.

Any breach of these obligations is subject to an administrative fine of up to EUR 75,000 for natural persons and up to EUR 375,000 for legal persons. The maximum fine incurred is raised to EUR 150,000 for natural persons and to EUR 750,000 for legal persons in the event of repetition of the breach within two years from the date on which the first judgment became final.

Ordinance No 2019-359 of 24 April 2019  recasting Title IV of Book IV of the Commercial Code relating to transparency, practices of restrictive competition and other prohibited practices.

Law No 2021-1357 of18 October 2021 for the protection of farmers' remuneration, OJ 19 Oct. 2021.

Law No 2023-221 of 30 March 2023 aimed at strengthening the balance in commercial relations between suppliers and distributors, OJ 31 March 2023.

The same undertaking must be included in the call for tenders when contracts are concluded following a bidding procedure.

French Competition Law

152. Contractual formalities

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Les notions juridiques connexes

152. Contractual formalities

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise