EGalim and the threshold for resale at a loss: manage prices under constraints
The no-loss resale threshold prohibits reselling a product for less than its actual purchase price.
For food products, it is increased by 10% through April 15, 2028, and discounts are capped at 34% by value and 25% by volume; for household goods, cosmetics, and personal care products, the cap is 40% by value.
These rules establish a minimum threshold that adjusts based on each purchase condition and limit promotional mechanisms. They must be integrated into the pricing engine as thresholds calculated on a per-product basis, rather than being enforced retroactively.
A competitor is listing a benchmark product at a price you are not allowed to charge. This isn't necessarily a mistake on their part: it's the result of the no-loss resale threshold, which varies depending on each seller's purchasing terms.
This article is intended for pricing, purchasing, and promotions teams in the food retail and consumer goods industries.
It outlines the SRP+10 and the EGalim promotion caps as they apply through 2028, and how they affect pricing decisions.
Break-even point and SRP+10: What are we talking about?
The break-even price is the price below which a distributor cannot resell a product in its current condition.
It corresponds to the actual purchase price: the net invoice price, minus any other financial benefits provided by the supplier, plus certain taxes and shipping costs.
For food and pet products, this threshold is increased by 10 percent. This is the “SRP+10,” established by the EGalim Act, which has been in effect since 2019 and was extended through April 15, 2028, by the Act of April 14, 2025.
The same laws set caps on promotions in the mass-market retail sector. Together, these rules establish a minimum and a maximum for each price; they are part of the price compliance rules that every retailer must follow.
A floor that shifts with every purchase condition
The threshold is not a figure that is set once a year. It depends on the bill, as well as the discounts and benefits offered by the provider, which change as negotiations and agreements progress.
A better-negotiated year-end discount lowers the effective purchase price, and thus the floor price. A supplier price increase raises it, sometimes during the week.
The distinction between these components is explained in our article on the front margin and the back margin.
The law of April 14, 2025, clarified that the prohibition on reselling at a loss also applies to products sold under private labels, and it tightened the penalties. The topic of price differences between brands is discussed in “Private Labels and National Brands.”
The law provides for a few limited exceptions, such as sales, clearance sales, seasonal items at the end of the season, or perishable goods at risk of spoiling quickly.
EGalim Promotion Caps
This is the cap on food promotions, by value, which has been extended through April 15, 2028, with a 25% cap by volume. It has been raised to 40% for household goods, cosmetics, and personal care products.
(economie.gouv.fr, regulation of promotions, Law of April 14, 2025)
In terms of volume, food products sold at a discount may not exceed 25% of the annual volume specified in the agreement with the supplier.
For household goods, perfumes, and hygiene products, the value cap has been raised to 40% under the 2025 law.
These caps apply to all pricing mechanisms, not just percentage-based discounts. This is where many promotional strategies come into play.
| Promotional Mechanics | Benefit Granted | 34% cap (food) |
|---|---|---|
| -34% immediately | 34% | Authorized |
| Buy 2, get the 3rd free | 33.3% | Authorized |
| 50% off the second item | 25% | Authorized |
| 70% off the second item | 35% | Beyond the ceiling |
| Buy 1, Get 1 Free | 50% | Beyond the ceiling |
Retailers have therefore shifted their competitive focus to other areas: promotional strategies that comply with the cap, a more refined selection of featured products, and a greater emphasis on non-food categories.
The rationale behind these trade-offs is explained in the promotional pricing strategies.
How These Rules Affect Pricing
There is a limit to how much you can model yourself after a competitor
For a benchmark product, there is a temptation to match the lowest price on the market. The SRP+10 sets a limit on this price matching, which varies by retailer since it depends on each retailer’s purchasing terms.
A competitor can therefore legally advertise a price that you are prohibited from charging. The solution doesn't always lie in the price of that product: learn when to follow the market and how to measure your price image.
The margin is being rebuilt elsewhere
The SRP+10 was designed so that the excess margin on food products would benefit suppliers and producers. Retailers are required to submit a document each year, before September 1, detailing how this excess margin was used.
In terms of pricing, the effect is twofold: less room to lower prices on loss leaders, and a shift in the product mix toward other categories. See pricing in the food retail sector.
Supplier price increases are passed on under duress
When a supplier's rate increases, the floor automatically rises. A price that isn't adjusted in time may fall below the threshold without anyone having decided to do so.
Quantifying the impact of a price increase before passing it on is the focus of our article on price elasticity in the agri-food sector.
Managing Prices Under EGalim Restrictions
Our belief: SRP+10 and promotion caps cannot be managed in a spreadsheet used for post-hoc monitoring. They must serve as parameters for the pricing engine, calculated for each product based on its up-to-date purchase terms.
This requires a reliable actual purchase price, rules that flag a price below the floor price before it is published, and a promotional plan that is reviewed at the time it is developed, not at the time it is reviewed.
The implementation within a tool is detailed in “Managing Discount Offers with a Pricing Tool.” The discount offers section is governed by the 30-day reference price rule.
The Booper MPS platform natively integrates the no-loss resale threshold, the 10% markup on food items, and promotional caps into its pricing and promotion management modules.
Are your SRP+10 terminals up to date?
Our experts will help you incorporate the break-even point and EGalim caps into your pricing and promotional policies.
Let's discuss your EGalim challengesFAQ: EGalim and the Threshold for Resale at a Loss
This is the price below which a distributor cannot resell a product in its current condition. It corresponds to the actual purchase price of the product.
This actual purchase price is based on the net invoice price, minus any other financial benefits granted by the supplier, plus certain taxes and shipping costs.
The prohibition is set forth in Article L.442-5 of the Commercial Code and also applies to private-label products.
This is the 10% increase in the threshold for resale at a loss applied to food and pet products.
Stemming from the EGalim Act and in effect since 2019, it was extended through April 15, 2028, by the Act of April 14, 2025.
Its stated goal is for retailers' excess profit margins to benefit suppliers and producers, and retailers are required to document this annually.
Yes. The law of April 14, 2025, aimed at strengthening the economic stability and competitiveness of the agri-food sector, extended it until April 15, 2028.
The same law extended the regulations governing promotions through that date, raised the value cap to 40 percent for drugstore, fragrance, and hygiene products, and clarified that the prohibition on selling at a loss applies to private-label brands.
Discounts on food products are capped at 34 percent of their value and 25 percent of the annual volume specified in the agreement with the supplier.
The value limit applies to all promotions: instant discounts, prizes, and free products.
A “Buy 2, Get the 3rd Free” offer represents a discount of about 33% and is still allowed; a “Buy 1, Get 1 Free” offer represents a 50% discount and exceeds the limit.
No. For household goods, perfumes, and hygiene products, the value cap has been 40% since the law of April 14, 2025.
These products had been subject to the 34% cap under the EGalim 3 Act, effective March 2024. The legislature decided not to remove them from the cap, but raised the cap itself. The cap has been extended through April 15, 2028.
Because the threshold depends on each retailer's purchasing terms: invoice prices, discounts, and negotiated benefits vary from one retailer to another.
A competitor with a better purchasing position can legally list a price lower than your minimum. Matching that price would mean selling at a loss.
The solution, then, lies in other products, other approaches, or negotiation—not in lowering the price of this product.
By using the threshold as a benchmark for the price engine, calculated for each product based on its current purchase terms.
Any change in a supplier's rates or discounts must result in an update to the minimum price, and any price offered below that minimum must be reported before publication.
Promotion caps are monitored in the same way—during the development of the promotional plan rather than afterward.
In the toy industry, Black Friday kicks off the Christmas shopping season, which accounts for more than a third of annual sales. With the 30-day rule, its price becomes the benchmark for nearly all December promotions.
The discount applies only to the toys being compared, not to licensed products or this year's new releases. Baby care—a thoughtful purchase driven by the timing of births—calls for moderate discounts.
In the high-tech sector, Black Friday accounts for a major portion of annual sales and takes place two months after the back-to-school product launches. It is intended to clear out the previous generation of products rather than to sell off the new ones at a discount.
Refurbished products set a ceiling on the price of new items, and some prices are rising due to the cost of components. The advertised discount is always calculated based on the lowest price over the past 30 days.
When it comes to home appliances, Black Friday success depends more on the selection of models than on the size of the discounts. An 8% price reduction may require a 50% increase in sales to maintain the same profit margin.
It's best to act quickly on the models that are actually being compared, maintain the prices of exclusive models, focus on delivery, installation, and trade-ins, and prepare the 30-day policy starting in October.