LONDON (Reuters) - Retail industry association EuroCommerce has lodged a formal complaint with the European Commission over a French law that limits supermarkets' ability to discount certain consumer products in France.
EuroCommerce argues the law, dubbed "Descrozaille" after the French lawmaker who proposed it, infringes European Union rules on free movement of goods and services within the single market. In a statement on Thursday the group called on the European Commission to "urgently take action".
Christel Delberghe, director general of EuroCommerce, said the law prevents retailers and wholesalers from buying products at a pan-European level, thereby impacting their ability to offer lower prices to shoppers.
A spike in inflation has heightened tensions between supermarket chains and consumer goods firms in Europe over the price of branded products, with retailers like France's Carrefour (EPA:CARR) accusing some packaged food and drink firms of unjustified price rises.
Pricing negotiations between grocers and consumer goods firms are also breaking down more often.
In France, Carrefour and other retailers have criticised the Descrozaille law, which sets a 34% limit on discounts supermarkets can offer on beauty, hygiene, and care products.
Carrefour CEO Alexandre Bompard has said the law, meant to protect small suppliers, will in reality limit retailers' bargaining power and benefit multinationals. The law is set to come into effect in March 2024.