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Diapers, detergents, toothpaste, cosmetics… The end of megapromotions comes into effect this Friday March 1st

Save 70% on shaving gel at Carrefour; 60% immediate reduction on liquid laundry detergent at E.

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Diapers, detergents, toothpaste, cosmetics… The end of megapromotions comes into effect this Friday March 1st

Save 70% on shaving gel at Carrefour; 60% immediate reduction on liquid laundry detergent at E.Leclerc. Rarely has the hygiene, maintenance and beauty section - nicknamed DPH in mass retail jargon - seen such discounts until the end of February. However, we will have to say goodbye to super promotions. From this Friday, March 1, the EGalim 3 law, known as the “Descrozaille” law, named after its rapporteur in the National Assembly, limits promotions on these everyday products to 34% in value and 25% in volume.

Detergents, shampoos, soaps and other hygiene products are now placed in the same boat as food products, banned from mega-promotions since the entry into force of the EGalim law in 2018. Parliamentarians thus wanted to protect manufacturers from this sector of sometimes “aggressive” discounts practiced by large retailers. These discounts, popular with consumers, would be “destructive of value for hundreds of French SMEs”, we read in the explanatory memorandum of the law. The measure is being tested until April 15, 2026, at the end of which it may be renewed, or not, by parliamentarians.

Also read: Inflation, rise of “discounters”... The big drop-off of hygiene and beauty products in supermarkets

By adopting this controversial measure, the deputies wanted to put an end to a perverse effect of the first EGalim law. By restricting promotions on food in order to guarantee a decent income for farmers, the 2018 law caused those on DPH shelves to explode. Distributors had compensated for the end of promotions on foodstuffs by increasing discounts on the non-food sections, hygiene and maintenance in the first place. “Prices were inflated outside of these megapromotions, which is why the measure will in reality be neutral on purchasing power,” argued Frédéric Descrozailles, the rapporteur of the law in the Assembly, in the morning of RMC this Friday.

The distribution giants do not agree with this argument. Leclerc, Intermarché, Système U, Carrefour: all protested against an “irresponsible and inflationary” measure, according to the president of the Federation of Commerce and Distribution (FCD) and CEO of Carrefour, Alexandre Bompard. The leader went so far as to write a letter to the presidents of the parliamentary groups to ask them for a moratorium on the application of the text. “This provision affects the most vulnerable French households who are by far the most promophile,” he argued, judging the measure “economically unfounded”, the DPH sector being “largely dominated by large foreign multinationals”.

United, the supermarkets could have won the battle. Especially since they had a choice ally, in the person of Bruno Le Maire. The Minister of the Economy himself had joined the distributors' camp, no doubt pushed by the exasperation of the French in the face of soaring prices on shelves. "I hope that we can lift the limitation on promotions on these products,” he assured last November on the BFMTV morning show.

Also read: “No, it is not the role of the government to encourage us to consume less”

It is difficult, however, to circumvent the sovereign choice of parliamentarians. Bercy still tried to reverse the capping of promotions by using the bill aimed at bringing forward the date of commercial negotiations, promulgated in November 2023. An amendment to this effect was tabled at the start of the legislative process. It did not last long: from the start of the debates in the Economic Affairs Committee, it was deemed inadmissible by the Assembly. The deputies argued that the amendment was akin to a “legislative rider”, that is to say a provision unrelated to the bill in question. Helpless, Bercy is now throwing the ball back into the assemblies' court. “Only parliamentarians can undo what they have done,” says an advisor.

Pointed out by the Minister of the Economy and distributors, the authors of the law held their ground. Rapporteur of the text to the Senate, Anne-Catherine Loisier defends her provision tooth and nail. “This is essential because many manufacturers or subcontractors in the sector are French SMEs. Strangling them with stratospheric promotions is endangering their financial stability and threatening thousands of jobs.”

Also readPromotions, private labels, discount brands… What will consumption look like in 2024?

The elected official does not hide her resentment towards Bercy, which, under the guise of relieving the purchasing power of the French, would have “blurred the message”. “Giving distributors complete latitude to offer discounted prices is to torpedo the spirit of the EGalim laws, which aim precisely to rebalance the relationship between distributors and manufacturers,” squeaks the senator. She also reminds that supermarkets will still be able to offer promotions, since these are not prohibited, but only limited. “There remains room for maneuver since distributors do not achieve 25% volume promotions on these departments today,” she argues.

It is not the industrialists who will say the opposite. On the day the law comes into force, manufacturers of cleaning and hygiene products are enjoying their victory. “The sector is very satisfied with this measure,” confides an industrial representative. The text restores “equity between food and non-food”, he believes.

It would be beneficial for a sector severely shaken by inflation, whose average profits are now lower than those of the agri-food industry. “It is the manufacturers, not the supermarkets, who finance the promotions,” recalls the industrial representative. And to emphasize that the law will rebalance the sector by putting large international groups on an equal footing (Unilever, Procter

Still, the distributors could well leave feathers there. According to Nielsen IQ, “heavy” promotions, above 34% discounts, represent half of the turnover achieved in this segment. With the end of mega-promotions on major brands, consumers will certainly switch to distributor brands. “We may have a good surprise on that front,” admits a spokesperson for Système U. Unless customers prefer to fall back on Action type discounters, who, through the central purchasing abroad are able to offer discounted prices all year round. “It’s the blind spot of the law,” complains the spokesperson. Large stores can console themselves with the very good figures obtained during the last mega-promotions in February: sales in the “maintenance” sections jumped by 32% in volume, those in the “beauty” section by 14.7% in value, during the week of February 19 to 25 alone.

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