COMPETITION • FRENCH LAW • PRICE TRANSPARENCY
New promotional instruments or “NIPs” refers to reduction coupons, loyalty points carried on the store cards and various other advantages granted to the consumer at the checkout.
Although they are sometimes imposed by retailers, the cost of NIPs is borne by the suppliers. Legislators have therefore intervened to limit abuse. Under Article L. 441-4, VII of the Commercial Code, “the conditions under which, where applicable, the supplier undertakes to grant consumers, over the course of the year, promotional advantages on its products or services are set out in mandate contracts entrusted to the distributor or service provider; concluded and performed in accordance with Articles 1984 et seq. of the Civil Code, each of these mandate contracts specifies, in particular, the amount and nature of the promotional advantages granted, the period for which they are granted and the terms and conditions for their implementation, as well as the terms and conditions for accountability by the distributor to the supplier”. Their amount is regulated in the agricultural sector: they may not exceed 30% of the value of the unit price scale, including management fees.
