In France, the period of late February is traditionally the time of the conclusion of contracts between large distribution networks and their suppliers. “The price war. Tensions in the negotiations of major retailers and producers” – this is the title of an article by Laura Mota in the French magazine “the World” (Le monde). In addition to the prices, which at this moment are fixing for the coming year, the sales of goods are affected by the arrangement of goods on shelves (or merchandising). The manufacturer is fighting for it too.
In the country of traditional, but working bureaucracy, the relationship between the networks and producers are codified: first, by the law on the modernization of the economy dated August 2008, and secondly, by the law Sapin 2, adopted in December 2016. The law Macron 2015, aimed at deterring distributors in pressure on manufacturers, provides for a fine of 2 million euros up to 5% of their turnover.
These talks are preceded by the agreement on the arrangement of goods in the retail space and the collection of quotations (average price of the year) by 30 November of the previous year. The supply contract may be concluded for several years, and the price can change due to objective reasons (the”changes in the price of factors of production”).
Today, a week before the end of the negotiations, only one-third of manufacturers (data of the Institute for the study of consumption or l Institut de liaisons et d’études des industries de consommation, ILEC) agreed on a price and signed a contract. There is a fierce game. No one of the manufacturers, according to the General Director of the Institute Richard Panky (Richard Panquiault) has not signed a multi-year contract.
Due to the fact that Russia has a large trading network who have an impact on producer’s prices, probably, something similar will soon come back to our country… come Back, because the regulation of trade in Soviet times is an unsurpassed expertise.