“EGALIM 2” law of 18 October 2021: A return of discrimination in commercial negotiations and an increased complexity of negotiations

Since 19 October, the law n° 2021-1357 of 18 October 2021 aimed at protecting farmers’ remuneration, known as the “Egalim 2” law, imposes new obligations on sellers and buyers of food products.

• Prohibition of discrimination – Article 8 of the law reintroduces the prohibition of discrimination in the field of the sale of food products between professionals, whereas the prohibition of discrimination had been repealed in 2008 by the LME (Law of Modernisation of the Economy) in all fields, to give more flexibility to economic operators in their commercial negotiations. Overall, after the simplification and streamlining effort provided by the Administration in 2019, (i) the list of restrictive competition practices is once again extended, and (ii) logistics penalties are now strictly regulated.

• General terms and conditions of sale – Article 4 of the law imposes new and onerous price transparency obligations on food products sellers. The latter must specify the proportion of agricultural products in their products, in volume and value, in their general sales conditions, under penalty of administrative sanctions.

• Written agreement for food products – A new written agreement, specific to food products, is introduced, with the following particularities: (i) the obligation to negotiate “line by line”, (ii) an automatic price revision clause, (iii) a prohibition on negotiating the value of agricultural raw materials, in addition to the other obligations usually applying to such agreements.

• Written contract – Article 1 of the Law now requires all suppliers of agricultural products to conclude a written contract to sell their products, the content of which is set out in the Law.

• Private label products – New rules are introduced for some private label products.

• Dispute Settlement Committee – Article 11 of the Law establishes a new administrative authority: the Agricultural Trade Dispute Settlement Committee. Agricultural Trade Relations Mediator, Agricultural Trade Dispute Settlement Committee, Trade Practices Review Board (CEPC), national court: what coordination? what logic?

• Written contract – Article 1 of the law now requires all suppliers of agricultural products to enter into a written contract to sell their products, with the content of the contract set by law.

• Private labels – New rules are introduced for private label products for certain products.

• Dispute Settlement Committee – Article 11 of the Act establishes a new administrative authority: the Agricultural Trade Dispute Settlement Committee. Agricultural Trade Relations Ombudsman, Agricultural Trade Dispute Settlement Committee, Trade Practices Review Commission, judicial judge: what coordination? what logic?

For further information, please contact Michel Ponsard (m.ponsard@uggc.com) and Nizar Lajnef (n.lajnef@uggc.com)