Foodservices: understanding the impact of the Egalim 3 law

Sailing at the heart of economic and food news in recent years, the Egalim law has stood out as a real landmark for players in the food chain. The result of the États généraux de l'alimentation (French national assembly on food) launched in 2017, the primary aim of this law is to ensure a fair distribution of value between all links in the chain, from producer to consumer.

The first two drafts of this law, Egalim 1 and 2, directly changed the landscape of foodservice. They introduced standards designed to promote healthy, high-quality, sustainable food. In particular, minimum percentages for the introduction of organic, local or quality-signature products have been defined, redefining the priorities and challenges of catering managers.

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The context of the Egalim 3 law

The Egalim law has evolved with a clear desire to harmonize the agri-food sector. Its origins date back to 2017, during the États généraux de l'alimentation, aimed at transforming the way we produce, distribute and consume.

From there, the various versions of the Egalim law emerged, focusing on strengthening the role of producers and food quality for all. This progressively enriched approach is aimed above all at sustainability.

The Egalim 3 law, effective from 1ᵉʳ April 2023, continues this mission by refining commercial relations between suppliers and distributors. And even if contract catering is not directly concerned, indirect impacts may eventually emerge.

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The main objectives of the Egalim 3 law

Continuing the efforts of its predecessors, the Egalim 3 law sets out renewed ambitions for the agri-food sector. Let's take a closer look at its main aims.

• Rebalancing relations between producers and buyers: Historically, the imbalance of power between these players has often been a source of tension. One of the major challenges of this third version is to offer producers fairer negotiating conditions, particularly in the face of the giants of supermarket distribution. The aim? To ensure that the price paid to producers truly reflects the cost of production, thereby guaranteeing fair remuneration.

• Repositioning value within the distribution chain: The question of how to distribute added value has often been raised. Egalim 3 aims to ensure that every player in the chain, from field to plate, receives a fair share of this value. This is not just an economic issue, but also a way of strengthening the resilience of the entire sector.

• Strengthening commercial relations between suppliers and distributors: More than ever, the law advocates closer collaboration between these two key players. By establishing clear rules, the Egalim 3 law aims to limit abuses, prevent protracted disagreements and promote a healthy, lasting understanding.

👉 To find out more: the impact of the Egalim law on mass catering

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No direct impact on the catering industry

At first glance, the Egalim 3 law makes one thing clear: the catering industry seems to have been left out in the cold. But what is it really?

Clarifying the law's provisions: unlike previous versions, which directly addressed the contract catering sector, the Egalim 3 law does not explicitly contain any measures specific to this field. It is therefore pertinent to examine the reasons for this "absence".

Analysis of possible reasons for this omission :

• Prioritizing the issues: With a marked focus on relations between producers, suppliers and distributors, it is possible that the legislator has chosen to concentrate his efforts on the most critical areas of the food chain.

• Previous impacts: Previous versions of the Egalim law have already led to numerous changes for the foodservice sector. We can therefore assume that this new edition aims to give the sector time to assimilate and implement the previous provisions.

• Indirect interactions: Although the foodservice sector is not mentioned as such, changes in the distribution chain could ultimately influence this sector. For example, if producers benefit from better conditions, this could lead to an improvement in the quality of products available for foodservice.

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2 indirect consequences for foodservice

Even in the absence of a direct impact, legislative changes, particularly in a field as interconnected as agri-food, can have collateral effects. Although not directly targeted by the Egalim 3 law, the foodservice industry is not immune to the vibrations of changes initiated elsewhere.

1. Rising prices and supply problems

• Higher production costs: If producers are better paid, this could lead to higher production costs, which would then be passed on to consumer prices. In this context, foodservice managers could see their supply costs rise.
• Changes in availability: The strengthened balance between suppliers and distributors could lead to a diversification of supply sources for supermarkets. This could have the effect of making certain products more or less accessible to mass caterers, depending on market dynamics.

2. The opportunities

• Closer collaboration: The principles of the law could encourage closer collaboration between producers and food service operators, paving the way for special partnerships and short distribution channels.

• Enhancing the value of local produce: If supermarkets focus more on local produce, this could stimulate a general craze for local products, offering the catering industry a great opportunity in terms of communication and offerings.

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4 tips for restaurant and catering managers

In an ever-changing environment, marked by the new directives of the Egalim 3 law, it's vital for foodservice players to stay alert and adjust their strategies. Here are a few recommendations to help you navigate effectively in this context.

1. Anticipating change

Regulatory watch: Make sure you keep abreast of the latest legislative developments, because even if the Egalim 3 law doesn't directly target your sector, its repercussions could manifest themselves indirectly.

Menu adaptability: Be ready to adjust your offers according to price variations and product availability. 

2. Maintain healthy relationships with suppliers

Ongoing dialogue: Maintain transparent, regular communication with your suppliers. 

Balanced negotiations: While seeking to optimize costs, maintain fairness in commercial relations. Win-win negotiations guarantee a lasting collaboration!

3. Optimize costs

Group purchasing: Consider the possibility of grouping your purchases with other foodservice operators to benefit from advantageous rates.

Exploring short circuits: Local sourcing can offer benefits both in terms of cost and product freshness. 

4. Rigorous inventory management

Reduce waste by efficiently managing your inventory. 

👉 Find out more: 9 tips for managing your company restaurant

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