French Commercial code
In forceI.-The contract concluded between a supplier and a distributor relating to the design and production of food products in a manner that meets the specific needs of the purchaser and sold under a distributor's brand mentions the price or the criteria and procedures for determining the purchase price of the agricultural products used in the composition of these food products.
The determination of the price takes into account the efforts of innovation made by the manufacturer at the request of the distributor. The price negotiation does not concern the share, in the price proposed by the manufacturer, of the price of agricultural raw materials and processed products mentioned in I of Article L. 441-1-1.
The contract includes an automatic price revision clause based on changes in the cost of the agricultural raw material or processed products subject to I of article L. 441-1-1 of this code used in the composition of the food products. The parties freely determine the revision formula, taking into account in particular the indicators relating to production costs in agriculture mentioned in III of article L. 631-24 of the Rural and Maritime Fishing Code.
The distributor may ask the manufacturer to appoint an independent third party to certify, within fifteen days, the accuracy of the variation in the cost of the agricultural raw material borne by the manufacturer. In this case, the manufacturer shall provide the independent third party, within ten days, with the documents justifying the accuracy of these elements. The costs of the independent third party's intervention shall be borne by the distributor. In the event of inaccuracy or wilful deception on the part of the manufacturer with regard to the variation in the cost of the agricultural raw material or the processed product, established by the independent third party and resulting in the impossibility of issuing the certificate mentioned in the first sentence of this paragraph, these costs shall be borne by the manufacturer. The independent third party is bound by professional secrecy with regard to the facts, acts and information of which he may have become aware by reason of his duties.
Ia A.-Where the contract covers a period of more than twelve months, it sets an annual date on which the price is renegotiated to take account of fluctuations in the prices of the raw materials used in the composition of the product.
Negotiations shall not cover the proportion of the price proposed by the manufacturer at the time of this renegotiation represented by the price of agricultural raw materials and processed products composed of more than 50% agricultural raw materials used in the composition of the product. The last paragraph of I of this article shall apply at the time of this renegotiation.
I bis.-In the event of a call for tenders relating to the design and production of food products according to methods that meet the specific needs of the purchaser and sold under a private label, the call for tenders shall include a commitment by the distributor relating to the forecast volume that it wishes to have produced.
I ter.-The contract referred to in I includes a clause relating to the forecast volume that the distributor undertakes to have produced over a given period as well as a reasonable period of notice enabling the manufacturer to anticipate any variations in volume.
Ic: The contract defines the minimum contractual notice period to be observed in the event of termination of the contractual relationship. It provides for the fate and terms of disposal of packaging and finished products in the event of termination of the contract.
II.-The obligation laid down in I applies only when the sale of agricultural products is the subject of a written contract. It applies, where applicable, when the seller is a company mentioned in article L. 521-1 of the Rural and Maritime Fishing Code.
III.-The contract referred to in I includes a clause allocating the various additional costs arising during the performance of the contract between the distributor and the supplier.
IV.-No expense relating to promotional operations for a product sold under a private label may be charged to the manufacturer.
V.-The contract establishes an alert system and periodic exchanges of information between the distributor and the manufacturer in order to optimise supply conditions and limit the risks of stock-outs.
VI.-Any breach of this article is punishable by an administrative fine of up to €75,000 for a natural person and up to €375,000 for a legal entity.
The maximum fine incurred is increased to €150,000 for a natural person and €750,000 for a legal entity in the event of a repeat breach within two years of the date on which the first penalty decision became final.
