ARTICLE
24 February 2020

Trade Negotiations For 2020

KL
Herbert Smith Freehills Kramer LLP

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Herbert Smith Freehills Kramer is a world-leading global law firm, where our ambition is to help you achieve your goals. Exceptional client service and the pursuit of excellence are at our core. We invest in and care about our client relationships, which is why so many are longstanding. We enjoy breaking new ground, as we have for over 170 years. As a fully integrated transatlantic and transpacific firm, we are where you need us to be. Our footprint is extensive and committed across the world’s largest markets, key financial centres and major growth hubs. At our best tackling complexity and navigating change, we work alongside you on demanding litigation, exacting regulatory work and complex public and private market transactions. We are recognised as leading in these areas. We are immersed in the sectors and challenges that impact you. We are recognised as standing apart in energy, infrastructure and resources. And we’re focused on areas of growth that affect every business across the world.
However, the scope of this article remained uncertain, despite a definition of FMCG as single-use, fast-moving and widely consumed goods.
France Antitrust/Competition Law

In April 2019, Ordinance no. 2019-359 amended Title IV of Book IV of the French Commercial Code, and in particular the rules of negotiation and formalization of commercial relations by inserting a new Article L.441-4, which establishes specific requirements for annual commercial agreements (conventions uniques) between suppliers and distributors (except for wholesalers) relating to fast-moving consumer goods (FMCG).

However, the scope of this article remained uncertain, despite a definition of FMCG as single-use, fast-moving and widely consumed goods.

Adopted on Dec. 19, 2019, Decree no. 2019-1413 now sets out the detailed list of FMCG, which includes food products, alcoholic and nonalcoholic beverages, electric batteries, washing and maintenance products, cleaning articles, paper articles, animal feed, personal hygiene articles and beauty products, etc.

For annual commercial agreements concerning FMCG, suppliers must comply with the three-month period before the deadline of March 1 each year to communicate their general terms and conditions to distributors.

These specific annual commercial agreements must indicate the scale of unit prices used as a basis for negotiation and the forecast turnover and include the business plan for the commercial relation. In addition, obligations relating to the terms of the sale and other obligations intended to promote the commercial relations (referred to in 1° and 3° of III of Article L.441-3 of the French Commercial Code) must apply at the same time as the effective date of the agreed price, which shall apply no later than March 1. 

Infringements of these specific rules relating to the annual negotiation between suppliers and resellers are sanctioned by fines up to €75,000 for an individual and €375,000 for a legal entity. This amount can be doubled in the event of repeat infringement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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