French consumers association UFC-Que Choisir is urging local politicians to “enrich” proposed amendments to the laws governing below-cost selling and commercial co-operation.
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The association believes the legislation, which will be discussed in the French parliament tomorrow (21 November), will have limited impact unless competition is further encouraged among retailers.
In their present form, the amendments revise the ways in which cost prices are determined. These are “net net” prices – or the net invoice price, net of year-end discount – and should include mutually agreed commercial co-operation between suppliers and retailers.
Retail buyers seek to close the gap between the “net net” and the “triple net”, or manufacturer’s residual profits. Triple net is the “net net” price, net of the cost of manufacturing, which becomes the supplier’s residual profit, before tax.
The association said: “The UFC-Que Choisir welcomes the discussion of the triple net in the debate. But, we all know that this reform will have a limited effect unless competition [between retailers] can be restored within every catchment area.”
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By GlobalDataFor UFC-Que Choisir, this would mean easing retail planning restrictions.
