Break-even point: definition, calculation, and SRP+10
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How many of your prices fall below the threshold after a supplier price increase?
Let's plan an exchangeDiscover our Modular Pricing SolutionThe break-even price is the price below which a retailer cannot resell a product in its current condition. It is equal to the actual purchase price: the net invoice price, minus any other financial benefits, plus taxes and shipping. For food products, it is increased by 10% until April 15, 2028 (SRP+10).
The Essentials
- The threshold for selling at a loss varies by retailer: it depends on each retailer's purchasing terms.
- It changes every time there's a price increase, a discount, or a contract ends—often without the selling price changing accordingly.
- It should be a reference point for price calculations, verified before publication, not a checkout inspection.
In 6 Questions
A minimum resale price set by law.
Any retailer who resells a product "as is."
A permanent SRP+10 on food products through April 15, 2028.
In France, Article L.442-5 of the Commercial Code.
Prevent destructive predatory pricing and protect suppliers.
Based on the actual purchase price, recalculated product by product.
How to Calculate the Break-Even Point
The calculation is based on the definition of the actual purchase price set forth in Article L.442-5 of the Commercial Code.
| Element | Effect on the threshold |
|---|---|
| Net unit price listed on the purchase invoice | Starting Point |
| Other financial benefits from the supplier, as a percentage of the net price | To be deducted |
| VAT and specific taxes related to resale | To be added |
| Shipping Costs | To be added |
| Coefficient 1.10 (foodstuffs, animal feed) | Valid through April 15, 2028 |
Example for a food product: net invoice price €2.00, other financial benefits 10%, shipping €0.05.
The actual purchase price excluding tax is €1.85, or €1.95 including 5.5% VAT. The SRP+10 threshold is therefore €2.15.
Free Calculator · Break-Even Point
SRP+10: The Increased Threshold for Food Products
Since February1, 2019, the actual purchase price of food and pet products has been multiplied by 1.10.
This surcharge, established by the Egalim Act, was extended through April 15, 2028, by the Act of April 14, 2025. Certain alcoholic beverages are subject to a specific calculation method.
| Case | Threshold Applied |
|---|---|
| Food and Animal Products | Actual purchase price × 1.10 |
| Non-food | Actual purchase price |
| Wholesaler selling exclusively to independent professionals | Actual purchase price × 0.9 |
| Private label | Same rules as for national trademarks starting in 2025 |
The SRP+10 is in addition to the promotional caps of 34% by value and 25% by volume on food products. The step-by-step calculation is detailed in our article on Egalim, the SRP+10, and promotions.
The 7 Exceptions to the Prohibition on Resale at a Loss
The law permits resale below the threshold in seven specific cases, listed in Section II of Article L.442-5.
| Exception | Condition |
|---|---|
| Cessation or Change of Business Activity | Voluntary or Forced Sale |
| End of the Season | Seasonal products, end-of-season items, or products between seasons |
| Outdated or obsolete products | Changes in fashion or technological progress |
| Downward Adjustment of Replenishment Levels | The price on the new bill replaces the old one |
| Local Alignment | Less than 300 m² (food) or 1,000 m² (non-food), same zone |
| Perishable goods | At risk of rapid deterioration, without outdoor advertising |
| Sales | Sale items as defined in Article L.310-3 |
Except in these cases, pricing below the threshold remains prohibited, even in response to a competitor.
Break-even point and pricing: what’s changing on a day-to-day basis
Our belief: Risk almost never stems from a decision to sell at a loss. It stems from a threshold that has shifted without the price following suit.
A supplier price increase
The price threshold increases on the day the price list takes effect; the price on the shelf may increase later.
An advantage that is not yet secured
A conditional discount that is not applied increases the actual purchase price.
A stacked promotion
The total of the crossed-out price, coupon, and loyalty card points may fall below the threshold.
Automatic alignment
A "match-price" rule with no floor follows the market right down to the threshold.
That is why it is important to treat the threshold as a limit for the pricing engine, recalculated whenever conditions change. This is one of the price compliance rules that our Modular Pricing Solution applies before any publication.
Frequently Asked Questions
Short answers to the most frequently asked questions about the threshold for selling at a loss.
What is the break-even point?
The "no-loss resale" threshold is the minimum price at which a retailer may resell a product in its current condition. Below this threshold, resale is prohibited under Article L.442-5 of the Commercial Code.
This threshold corresponds to the actual purchase price of the product. For food and animal feed, it is increased by 10 percent until April 15, 2028.
How do you calculate the break-even point?
We start with the net unit price listed on the purchase invoice. We then subtract any other financial benefits granted by the supplier, expressed as a percentage of that price.
Next, we add VAT, specific taxes, and shipping costs. The result is the actual purchase price, multiplied by 1.10 for food items.
What is the effective purchase price?
This is the legal basis for the “resale at a loss” threshold. It encompasses all of a retailer’s purchasing terms, including benefits not listed on the invoice.
Therefore, two distributors who purchase the same product do not have the same actual purchase price or the same threshold.
What is SRP+10?
SRP+10 is the “no-loss resale threshold” plus 10 percent, established by the Egalim Act. It has applied to food and pet products since February1, 2019.
The law of April 14, 2025, extended it until April 15, 2028.
Does the no-loss resale threshold apply to private-label products?
Yes. Under the law of April 14, 2025, the prohibition on reselling at a loss also applies to private-label products purchased under a manufacturing contract.
The threshold for private-label brands is therefore calculated with the same rigor as that for national brands.
What are the exceptions to the ban on reselling at a loss?
The law lists seven reasons: cessation or change of business, end of the season, products that are out of style or technically obsolete, reduced inventory levels, small stores matching prices with a local competitor, perishable products at risk of spoilage, and sales.
Each has specific conditions. Outside of these cases, no commercial justification can be made for a price below the threshold.
Can we match the price of a competitor who is selling below the break-even point?
No, except for small stores covered by the alignment exception (less than 300 m² for food stores, less than 1,000 m² for non-food stores, within the same business zone).
A competitor may legally advertise a price lower than your threshold because they have better purchasing terms. The solution, then, lies in offering different products, running a compliant promotional campaign, or negotiating.
What are the risks for a retailer who sells at a loss?
Selling at a loss is a criminal offense. It is punishable by a fine based on sales revenue—which may be increased if the price is advertised—and by an order to publicly post the court’s decision.
The DGCCRF monitors these practices, particularly during promotional campaigns.
Key Takeaways
- Break-even point = actual purchase price, specific to each retailer.
- SRP+10 on food and pet products through April 15, 2028, including private-label brands.
- Only seven exceptions, and none to match a competitor's pricing—except for small stores.
Do you want to protect your prices against the threshold for selling at a loss?
Booper recalculates the threshold whenever conditions change and blocks any price that falls below it.
Let's discuss your price thresholds →Learn more abour our promotion moduleThese articles can interest you
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.
Price compliance refers to the legal rules that a price and its display must follow.
In France, four rules apply: the reference price for discount advertisements, the prohibition on reselling at a loss, the EGalim promotional caps, and price disclosure requirements.
These rules are simple to state but difficult to apply to thousands of products and multiple channels. Most discrepancies stem from incomplete data at the time the price is set, not from any intention to mislead.
In the retail sector, a product's profitability isn't determined solely by its selling price. Part of it is determined on the shelf (the front-end margin), and another part is negotiated with the supplier, off the sales receipt (the back-end margin).
Far from disappearing, the back-end margin is shifting toward services and international operations. Managing one without the other often leads to underestimating—or overestimating—the actual profitability of a product.