Carrefour Shares Drop to 2020 Levels After French Ministry Requests Fine -- Update

Dow Jones06-18

By Michael Susin

Carrefour shares fell to their lowest levels since 2020 after the French finance ministry requested a fine for alleged abusive practices by the group toward its franchisees.

The French Ministry of Economics, Finance and Industrial and Digital Sovereignty on Tuesday said it requested the court of Rennes to impose a financial penalty and invalidate several clauses of the contracts between the Carrefour group and its franchisees after investigations found that several companies in the group were engaging in practices contrary to the French Commercial Code.

Although it didn't disclose financial terms, press reports said the ministry headed by Bruno Le Maire asked for a 200 million euros ($214.7 million) penalty.

Shares at 1104 GMT on Tuesday were down 8.6% at EUR13.30, the same levels as in November 2020.

The intervention is part of a lawsuit brought by nearly 170 franchisees at the end of 2023, the ministry added.

Carrefour said it "vigorously contests" the case and considered the penalty disproportionate.

"The ministry is intervening in a dispute that began several months ago, without providing any new information on the merits," the French grocer said.

"The amount of the fine is clearly unfounded, given the impact of the contractual clauses under discussion," it added.

Carrefour said it is confident in its ability to demonstrate both the validity of the contracts and the balance of its relationships with its partners.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

June 18, 2024 07:13 ET (11:13 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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