Purchasing power: what the law says which will limit promotions in supermarkets

A habit to break. Every two weeks, in the aisles of Leclerc in Marsannay-la-Côte, near Dijon (Côte-d’Or), Romain, a thirty-year-old father, snoops behind his shopping cart in search of interesting promotions. With two young children, he keeps his eyes peeled even more carefully when approaching the diaper, wipes and detergent aisles.

“Sometimes I get 50% off the second item. I’m not obsessed with it but I appreciate it when they do it, especially since everything is expensive now,” admits the young man. Let Romain take advantage of this, because with the entry into force of the “Descrozaille” law, on March 1, 2024, supermarkets will no longer be able to offer promotions beyond 34% in the drugstore, perfumery, hygiene and maintenance sections.

Since the start of the school year, this prospect has triggered the anger of large retailers who, citing persistent inflation, are calling for a moratorium to postpone the application of the law. “It’s only idiots who don’t change their minds,” said Michel-Édouard Leclerc on the radio at the end of September. The media president of the homonymous group aimed, without naming it, the presidential majority in the National Assembly, which refuses to postpone the measure. Emmanuel Macron’s recent statements encouraging supermarkets to sell their products without margins and their fuels at a loss do not help matters.

Favored multinationals

“On the one hand, the executive invokes purchasing power to ask distributors to make efforts, on the other hand they are prohibited from offering too big promotions. It’s incoherent, the sector doesn’t understand,” says Philippe Moati, professor of economics at Paris Cité University and specialist in mass distribution. The parliamentarians behind the law spoke of a desire to protect suppliers: “Shock promotions are destructive of value for hundreds of French SMEs,” they argued. On this point, the “Descrozaille” law is inspired by its big sister, the Egalim law, promulgated in 2018 (and reinforced in 2021) which also banned substantial reductions on food products, for the same reason. The price war in which the large stores were engaged ultimately affected small producers and farmers.

The big difference is due to the fact that the players in the hygiene or maintenance sector are not the farmers but the giants Colgate-Palmolive, Unilever (Dove, Signal, etc.) or Procter and Gamble (Fébrèze, Pampers, etc.). “It’s not suited to the actors or the moment. We are not talking about protecting small SMEs but about favoring multinationals. In addition, we are going to experience an inflationary episode for at least another year and a half, people need a helping hand,” assures Philippe Moati. At Leclerc in Marsannay-la-Côte, Romain only has six months left to find the toothpaste specials of the year.