New CEPC opinion on the rules on (re)selling at a loss and the supervision of promotions

On 15 May 2025, the CEPC issued an opinion on the application of the rules relating to resale at a loss and the supervision of promotions in the event that a central purchasing body intervenes as a supplier of franchisees.

On the inapplicability of the resale at a loss threshold provided for in the food sector in the relationship between the central purchasing body and independent supermarkets

As a preliminary, reminder of the general principle of prohibition of resale at a loss provided for by Article L442-5 of the Commercial Code

Article L442-5 of the Commercial Code prohibits the resale at a loss:

“The fact that any merchant resells or announces the resale of a product as is at a price lower than its actual purchase price is punishable by afine of €75,000. This fine may be increased to half of advertising expenses in the event that an advertisement, regardless of the medium, mentions a price lower than the actual purchase price “.

The threshold for resale at a loss is defined by paragraph 2 of the aforementioned article as:

“The net unit price appearing on the purchase invoice, less the amount of all other financial benefits granted by the seller expressed as a percentage of the net unit price of the product and increased by turnover taxes, specific taxes relating to this resale and the price of transport.»

The determination of the resale threshold at a loss applicable to food products resold in the same state by a central purchasing body to independent supermarkets

As part of this notice of May 15, 2025 (Notice No. 25-3 relating to a request for an opinion from a professional on the sale at a loss and the supervision of promotions in the context of the establishment of a mandate contract concerning the new promotional instruments), the Business Practices Review Commission (BPC) is questioned by a franchisee in the food sector on the determination of the threshold of resale at a loss applicable to food products resold in the state by a central purchasing body to independent supermarkets.

Ordinance No.2018-1128 of 12 December 2018 introduced, on an experimental basis, an increase in the resale threshold at a loss of 10% for food and products intended for pet food. This experimentation was recently extended by Law No. 2025-337 of 14 April 2025 aimed at strengthening the economic stability and competitiveness of the agri-food sector.

Under the terms of Article 125-I of Law No. 2020-1525 of 7 December 2020, “The effective purchase price defined in the second paragraph of I of Article L. 442-5 of the Commercial Code is assigned a coefficient of 1.10 for foodstuffs and products intended for the feeding of pets resold in the same state to the consumer, with the exception of products subject to the consumption rights mentioned in I of Article 403 of the General Tax Code“.

As the Commission noted in a previous opinion (Opinion No. 21-1), this experimental scheme concerns only resales to the consumer in the same state.

Therefore, the central purchasing body does not have to apply, when reselling food and products intended for pet food to independent supermarkets, a coefficient of 1.10 to determine the resale threshold at a loss to be respected.

On the other hand, this threshold must be respected when reselling to the final consumer.

On the supervision of promotional operations for consumers at the initiative of the central purchasing body.

In this opinion, the Commission was then asked about the establishment of promotional operations for consumers at the initiative of the central purchasing body and their impact with regard to the principle of prohibition of resale at a loss.

On the question of compliance with the terms set out in Article L. 441-4, VII of the Commercial Code if the central purchasing body itself finances a promotional operation for consumers

Under the terms of Article L441-4, VII of the Commercial Code, paragraph ¹:

“The conditions under which, where applicable, the supplier undertakes to grant consumers, during the year, promotional advantages on its products or services are set out in mandates entrusted to the distributor or service provider, concluded and executed in accordance with Articles 1984 et seq. of the Civil Code. Each of these mandate agreements specifies, in particular, the amount and nature of the promotional benefits granted, the grant period, the estimated quantity of products concerned and the terms of implementation of these benefits as well as the terms of reporting by the distributor to the supplier “.

The Commission was asked whether agency contracts in accordance with the requirements of Article L. 441-4, VII of the Commercial Code should be established in the event that the central purchasing body, from which the operating companies of the stores obtain their supplies, undertakes to finance the promotional operation for consumers themselves, by reimbursing the advantages granted to them in cash by the operating companies.

To this question, the Commission answers in the affirmative and considers that the fact of giving the operating companies a mandate to give consumers, in its name and on its behalf, at the checkout, promotional benefits on the resold products, which it will reimburse them after presentation of the accounts, effectively constitutes a “nip mandate”, under Article L. 441-4, VII of the Commercial Code, which must meet the formality of the article.

The impact of these promotional operations on the principle of prohibiting resale at a loss

The Commission was asked about the impact of the benefits granted to consumers under nip agency contracts in relation to the prohibition of resale at a loss.

The Commission recalls that a Circular of 8 December 2005 already admitted that the advantages granted by the central purchasing body, not to the supermarket, but directly to consumers under a mandate contract, do not affect the elements to be taken into account (resale price and actual purchase price) to ensure compliance with the legislation relating to the prohibition of resale at a loss by the supermarket.

Moreover, since the benefits are allocated to consumers through the supermarket and not to the latter, the granting of these benefits therefore has no impact on compliance with the prohibition of resale at a loss by the central purchasing body with regard to the supermarket.  However, it recalls that the amount of these benefits is capped at 30% for agricultural products mentioned in Article L. 443-2, milk and milk products.