LONDON/PARIS (Reuters) -Shares in French supermarket group Carrefour fell as much as 9.6% on Tuesday after a media report that the finance ministry was recommending a “record” fine against the company over the management of its franchise network.
French daily newsletter La Lettre published a 160-page legal complaint late on Monday from the finance ministry that claims franchise contracts signed by around 5,200 stores with Carrefour contain “a significant imbalance” profiting the group.
The document recommends a 200 million euro ($214.6 million) penalty, which the newsletter said was a “record civil fine”.
By 0806 GMT, shares in Carrefour were down 9.01% at 13.23 euro per share, their lowest level since November 2020.
Neither Carrefour nor the French finance ministry immediately responded to requests for comment.
The document published by La Lettre also demands that the company immediately amend around 10 clauses in the franchise contracts, with a penalty of 50,000 euros per day if it fails to take action.
The clauses cover areas such as excessive recommended resale prices and the requirement to source almost exclusively from Carrefour.
The complaint has been sent to the Rennes commercial court, and follows another claim filed by an association of franchisees in December 2023 to the same court for contractual violations, said the newsletter.
Carrefour is aiming to make half of its revenues in France from its franchised stores, CEO Alexandre Bompard said earlier this year.
($1 = 0.9318 euros)
(Reporting by Samuel Indyk in London and Dominique Vidalon, Dominique Patton and Leigh Thomas in Paris; Editing by Amanda Cooper and Jan Harvey)
