Evaluation of the French Egalim 2 law: a mixed review and prospects for evolution

The annual negotiations in the agri-food sector are now closed for the year 2025, but the successive crises encountered by the agricultural world have demonstrated that the imbalances in the distribution of value within the food production and distribution chain remain a topical issue. In response to these imbalances, the agri-food sector has seen the successive adoption, since 2018, of several so-called “Egalim” laws aimed at ensuring better remuneration for farmers and regulating commercial relations between the various stakeholders in the sector.

The French law No. 2021-1357 of 18 October 2021, known as “Egalim 2”, introduced a number of measures aimed at protecting the value of agricultural production throughout the food production and distribution chain. These measures include the principle of compulsory written contracts for the sale of agricultural products, the inclusion in contracts of an automatic price review mechanism, and the non-negotiable nature of the agricultural raw material component in the price of food products.

The consequences of this law and the difficulties encountered in its implementation were the subject of a report submitted on February 11, 2025 by the Egalim 2 law evaluation mission commissioned by the National Assembly’s Economic Affairs Committee.

More than three years after its adoption, the evaluation of the system shows that its economic impact remains difficult to measure. The price volatility observed between 2022 and 2024, as well as the lack of transparency on the margins of manufacturers and distributors, make it difficult to analyze the real effects on farmers' remuneration. The rapporteurs conclude that it is not possible at this stage to conclude on the economic effectiveness of the Egalim 2 law. The evaluation mission report also emphasizes that the contractualization of the sale of agricultural products remains too limited in certain sectors and that commercial negotiations have not undergone the expected structural evolution to favor this contractualization.

To remedy these flaws, 24 proposals have been put forward by the Egalim 2 law evaluation mission. These proposals demonstrate the committee’s intention to pursue the initial objectives of the Egalim 2 law, but also to address the difficulties and to take into account the new issues identified during the evaluation of the effectiveness of the measures of this law.

First objective: strengthening contractualization, illustrated by the following two proposals:

• The speeding up of the negotiation schedule, by shorting the duration of commercial negotiations with two deadlines: the first consisting of sending the general terms and conditions of sale between 15 November and 15 December, and the second consisting of signing the single agreement (“convention unique”) between January 15 and February 15.
• The facilitation of the contractualization, by establishing a standard contract framework, to be annexed to a decree, which would include the mandatory clauses of the proposed contract for the sale of agricultural products and which would include a notice to help agricultural producers construct the sections of this proposal.

Second objective: the increased safeguarding of the value of agricultural production in the construction of the price, in particular through the following three proposals:

• The extension of the ring-fencing of costs in price negotiations, which is currently limited to agricultural raw materials, to also include industrial raw materials (such as energy, transport, and packaging materials), to prevent negotiation pressures from shifting to these expense categories.
• The improvement of the efficiency of price revision or price renegotiation clauses, by simplifying their use by making the renegotiation clause optional when a revision clause is already included in the general terms and conditions of sale, and by extending the scope of the price revision clause to industrial raw materials.
• The extension of the mechanism for raising the threshold for resale-at-loss (known as “SRP+10”), which requires retailers to sell certain food products at a minimum of their purchase price plus 10%. A bill to this effect was submitted to the National Assembly on 13 February 2025 providing for an extension of the mechanism until 15 April 2028.

Third objective: strengthening sanctions against players in the agricultural product distribution chain which do not respect their obligations thanks to the following proposals:

• The repression through the prohibition of unfair commercial practices of the practice which would consist, for a distributor of agricultural or food products, of applying an abusively high commercial margin rate for a given product in relation to the average margin rate applied by this distributor.
• The increase of the number of agents in charge of monitoring compliance with the provisions of the Egalim law within the DGCCRF and the national organization FranceAgriMer.

Fourth objective: the fight against circumvention strategies in the face of the widespread use of international purchasing groups that allow large retailers to circumvent the French legislative framework. The evaluation mission has put forward the following proposals to this end:

• The joint and several liability of the distributor operating one or more retail stores in France for ignorance of the French rules governing commercial negotiation by an purchasing group (regardless of its place of establishment) when purchasing products distributed by this distributor.
• The extension at European level of the framework applicable to unfair commercial practices in relations between buyers in the production and distribution chain of agricultural products, also recognizing the criterion of the place of marketing of the products to determine the law applicable to these relations.

These various proposals thus pave the way for the adoption of a new Egalim 4 law. Parliamentary work on this subject will therefore need to be monitored closely over the coming months.

Authored by Mikael Salmela, Floriane Cadio de Kermainguy, and Camille Raymond.