The ensign strikes back. The Constitutional Council was seized of a priority question of constitutionality (QPC) concerning the logistical penalties that Leclerc inflicted on agro-industrial suppliers, and which earned him an injunction from the authorities in 2022, according to press releases on Friday February 9 . As a reminder, Leclerc is approaching 24% market share in France, ahead of Carrefour (20.1%) and Intermarché (15.1%). Its turnover in 2022 was more than 44 billion euros. And for good reason: the major distributor feeds one in three households.
At the end of 2022, Leclerc was targeted by an injunction under penalty emanating from the regional and interdepartmental direction of the economy, employment, work and solidarity (DRIEETS) of Ile-de-France, requiring him to “modify the clauses of contracts concluded with its suppliers relating to logistical penalties”, indicates the Council of State in a decision rendered on February 9.
The highest administrative court specifies that the leader of large-scale food distribution in France raised a priority question of constitutionality, considering that the administration’s decision ignored in particular “the principle of legality of offenses and penalties”. The Council of State considered that the legal texts do not “define the sufficient margin of error that the distributor is required to grant to its supplier in the contracts concluded with it” before imposing a logistics penalty.
Penalties diverted by distributors?
This point “raises a question of a serious nature” and there is therefore “reason to refer the priority question of constitutionality invoked to the Constitutional Council”, decided the Council of State. The Sages of rue Montpensier confirmed on Friday evening that they had been informed of this question. Logistics penalties are provided for in the contracts that supermarkets sign with their suppliers. As part of commercial negotiations, both parties agree on the purchase price of a product, but also on its delivery terms. If the contract is not respected, penalties may apply.
But the government, relying in particular on the work of the Fraud Repression Agency (DGCCRF), estimated that certain distributors are diverting these penalties “to restore their financial health” at the expense of suppliers. Abusive practices identified among certain brands, such as the issuance of “automatic penalties”, without suppliers being able to contact a physical contact to challenge them.
At the end of September 2022, the executive called for a “moratorium on logistical penalties”, a pressure boost which was in no way binding. At that time, the authorities indicated that four food distribution brands, whose identities had not been made public, had to comply with the regulations, “under penalty of financial penalties of several million euros “.
Leroy Merlin was called to order by the repression of fraud.
If these “logistical penalties”, inflicted on suppliers when they do not deliver their products on time, “can be justified to reduce delays” or delivery problems, they must not be “diverted from their objective”, estimated in November 2022 the government in a press release signed in particular by the Minister of the Economy Bruno Le Maire and that of Agriculture Marc Fesneau.
In November 2023, the DIY giant Leroy Merlin was called to order by the crackdown on fraud. “Leroy Merlin must stop its illicit practices in terms of logistical penalties against its suppliers,” underlines the institution on its site, taken up by our colleagues at Capital. The brand risks paying a fine of up to 13.5 million euros. Enough to teach him how to rebalance the balance of power between suppliers and mass distribution.