France Threatens Exceptional Tax on Agrifood Groups if Trade Negotiations Remain Stagnant

BFM BUSINESS INFO – Bruno Le Maire persists and signs with the major agrifood groups: if they do not reopen negotiations with distribution, they risk suffering an exceptional tax in the 2024 finance bill.

Inflation is falling everywhere… except in food. While the general rise in prices in May was at its lowest for a year, it still exceeded 14% over one year in food, after 15% in April. To break this double-digit inflation, the government is counting on the big manufacturers, summoned to urgently reopen trade negotiations with large retailers.

Except that the discussions skate and Bruno Le Maire gets annoyed. If nothing moves in the next few days, the Minister of the Economy and Olivia Grégoire, in charge of Trade, say they are ready and determined to activate the tax lever. According to information from BFM Business, it is an exceptional tax on turnover that is in the pipeline. It would be implemented in the 2024 finance bill.

Bercy raises the tone

Bercy has yet tried the soft way. After a meeting at the ministry on May 17 with the two ministers, the 75 largest agrifood groups had pledged to reopen negotiations by the end of May, beginning of June. But the ultimatum is coming to an end and the renegotiations have not really started. Bercy therefore threatens to tighten the screw.

Of the 75 major agrifood groups in the sights, this tax would apply to those who have pledged to reopen negotiations and who do not. The manufacturers concerned are those whose selling prices have increased by more than 10% since March 1, and whose cost of at least one raw material has fallen by more than 20%.

So far, these industrialists have seen nothing but a burst of political pressure behind Bruno Le Maire’s threat of taxation. But the minister’s services assure us that the threat is very serious, and that they could very easily introduce this tax, because they have quite simply already done so in other sectors.

Precedents in energy, digital…

Very recently, for example, the superprofits of energy companies have been specifically taxed, or even the refining activities of TotalEnergies in France.

Bercy also recalls that since 2019, France has taxed large digital companies, with a 3% levy on the turnover achieved in the country by around forty companies, and which should bring in nearly 700 million euros this year. euros.

Last example: in 2017, in Bruno Le Maire’s first budget, France had implemented an exceptional corporate tax surcharge for the 320 French companies that made more than 1 billion euros in turnover. The objective was to balance the budget after the cancellation by the Constitutional Council of the 3% tax on dividends.

In summary, “a tailor-made tax, we know how to do it”, we are told on the side of Bercy. But Bruno Le Maire still hopes not to have to come to that and is counting on the word given by the major industrialists to reopen negotiations in the coming days.