Price revision formula for agricultural raw materials
Since 20 August 2026, French law has let a food supplier include in its general terms of sale a formula that revises its prices with the cost of its agricultural raw materials. Once carried into the annual agreement, the formula cannot be negotiated. Here is how to build it, and the date by which each step must be ready.
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Your formula in six steps
20 August 2026The price revision formula comes into forceArticle 54 of French Law No. 2026-796 of 18 August 2026
6 November 2026Today
1 December 2026General terms of sale sent to retailersThree months before 1 March. Two months before 31 January for a supplier with turnover under €350M.
1List your agricultural raw materials
By 1 December 2026in 25 days
For each product, note the agricultural raw materials that weigh in your price, their geographical origin and their share by value and by volume. These are the three items the law requires in your general terms of sale whenever they include a formula.
The law leaves the supplier to choose which materials are indexed. The EGalim 2 FAQ of the DGCCRF, the French competition, consumer affairs and fraud control authority, accepts indexing all the agricultural raw materials of a product, or only those with a predominant impact on the price. For a wide range with varied recipes, the CEPC, the French commission that reviews commercial practices, recommends one formula per category of homogeneous products rather than one per item.
Illustrative example: a 370 g jar of apricot jam sold to the retailer at €2.00
The share by value becomes the weight of each material in the formula. The rest of the price, here 72% (jar, energy, labour, margin), does not move with it: a 10% rise in the cost of apricot only raises the price of the jar by 2.1%.
2Choose an indicator for each material
By 1 December 2026in 25 days
Each material follows a published, dated indicator that the retailer can check. The law refers to the framework for reference indicators of the French code rural: those of the interbranch organisations come first.
The supplier chooses its indicators “under the conditions defined in paragraph III of Article L. 631-24 of the code rural”. That text gives the interbranch organisations the task of publishing reference indicators, and the law of 18 August 2026 adds a rule to it: you refer to those indicators, unless you state expressly in writing that you use others, and why.
Code rural et de la pêche maritime, art. L. 631-24, III
Les parties se réfèrent à ces indicateurs de référence dans le contrat ou l'accord-cadre, sauf mention expresse, dans ce contrat ou cet accord-cadre, de leur choix de se référer à d'autres indicateurs relatifs aux coûts pertinents de production en agriculture et à l'évolution de ces coûts ainsi que des raisons de ce choix.
The Observatoire de la formation des prix et des marges (OFPM), the French observatory of prices and margins, brings these indicators together in a single table, published every quarter by FranceAgriMer. Not every interbranch organisation has published its own yet: the French Government was still saying so in July 2026. Where they have not, the agricultural technical institutes take over.
In the formula, name the exact series (its Insee identifier, for example) and what happens if it is rebased or discontinued: Insee, the French national statistics institute, sets out these rules on its page Indexing a contract. Avoid consumer price indices: they measure the supermarket shelf, not the raw material.
On LiveQuote, each material page brings together the LiveQuote index and the public curves available, for example for apricot, white sugar, wheat or cocoa. Every material we track is on the market prices page.
3Write the formula
By 1 December 2026in 25 days
The formula weights each indicator by the share of its material in the price, and leaves the rest of the price as it is. It must work the same way whether prices go up or down.
P = P₀ × [(1 - a - b)+ a × A / A₀+ b × B / B₀]
P
the revised price
P₀
the base price, the one in your price list
a, b
each material's share by value in the price, as stated in your general terms of sale
A, B
the value of each material's indicator on the revision date
A₀, B₀
the value of these indicators on the date of the base price
There is no official template for the formula in general terms of sale: this way of writing it is our own. It follows the weighting by material share that the CEPC recommends (Recommendation No. 24-1) and the multi-index structure of the guide “Le prix dans les marchés publics” (pricing in public contracts) by the OECP, the French public procurement observatory.
Illustrative example: apricot goes from 100 to 112 and sugar from 100 to 95
Term
Calculation
Result
Share of the price that does not move
1 - 0.21 - 0.07
0.72
Apricot
0.21 × 112 / 100
0.2352
White sugar
0.07 × 95 / 100
0.0665
Revision coefficient
0.72 + 0.2352 + 0.0665
1.0217
Revised price of the jar
€2.00 × 1.0217
€2.04
You still need to set in writing what the formula does not say:
The base price and its date, and the value of each indicator on that same date.
The observation period and the revision frequency, according to the length of your production cycle. The CEPC mostly sees quarterly or half-yearly revisions.
The trigger threshold. The law does not set one. The CEPC has found thresholds of 5 to 10% at SMEs in charcuterie and dairy, and asks that they stay realistic so that the clause actually works.
The same rules for increases and decreases: the law now requires this for the formula in general terms of sale.
4Put it in your general terms of sale
By 1 December 2026in 25 days
General terms of sale that include a formula must name the materials concerned, their geographical origin and their share by value and by volume. Without these three items, the administrative fine can reach €75,000 for a natural person and €375,000 for a legal entity.
Code de commerce, art. L. 441-1-1, IV bis
Les conditions générales de vente du fournisseur peuvent comporter une formule de révision automatique du barème des prix unitaires en fonction de la variation, à la hausse et à la baisse, du coût des matières premières agricoles entrant dans la composition du produit alimentaire ou du produit destiné à l'alimentation des animaux de compagnie. Le fournisseur détermine librement, selon la durée du cycle de production, la formule de révision, les matières premières agricoles concernées et, dans les conditions définies au III de l'article L. 631-24 du code rural et de la pêche maritime, les indicateurs utilisés. Cette formule s'applique selon des modalités de calcul identiques en cas de hausse comme en cas de baisse.
The product's agricultural raw materials that the formula covers.
The geographical origin of these materials.
The share they represent, by value and by volume.
The supplier freely chooses the formula, the materials and the indicators, according to the length of its production cycle. In the explanatory statement of its amendment, the Government adds that, on grounds of non-discrimination, the formula must apply in the same way to all of the supplier's customers.
The text covers food products and pet food whose general terms of sale fall under paragraph I of Article L. 441-1-1. Wholesalers and certain products listed by decree are excluded.
31 January 2027Signature, suppliers under €350MExperimental rule until 31 December 2029
1 March 2027Signature of the annual agreement
5Sign the annual agreement
By 1 March 2027in 115 days
The agreement takes over the formula from your general terms of sale as it stands: it is not negotiable. The retailer can only object to a price change, backed by objective data, if the link between materials and price is manifestly erroneous.
Code de commerce, art. L. 443-8, IV
Lorsque les conditions générales de vente du fournisseur comportent la formule mentionnée au IV bis de l'article L. 441-1-1, la convention comprend obligatoirement une clause reprenant cette formule, qui n'est pas négociable. Les évolutions de prix résultant de l'application de cette clause sont mises en œuvre au plus tard un mois après l'activation de celle-ci. Lorsque des données économiques objectives démontrent que le lien opéré par le fournisseur entre la variation du coût des matières premières agricoles concernées et son impact sur le barème de ses prix unitaires est manifestement erroné, le distributeur peut s'opposer à l'évolution de prix en transmettant au fournisseur ces données.
The retailer has one month from receiving your general terms of sale to accept them, or to justify in writing its refusal and the points it wants to negotiate. If it asks for a cut in your prices, it must provide objective evidence that justifies it.
For a supplier whose worldwide annual turnover is below €350 million, the agreement is signed by 31 January at the latest instead of 1 March, and the general terms of sale go out two months ahead instead of three. For a group, the highest consolidated or combined worldwide turnover is the one that counts. This rule is experimental until 31 December 2029.
Then, ongoing
6Apply the revisions
Ongoing
Once the clause is triggered, the new prices apply one month later at the latest. Track your indicators at each observation period and keep the data that justifies each revision.
The clause triggers by itself when the indicator crosses the threshold on the observation date: it must not depend on the will of either party. The new price applies no later than one month after the trigger, whether it goes up or down.
The old clauses rarely came into play. From 1 March 2025 to 28 February 2026, the French observatory of commercial negotiations found, for national brands, an activation in about 15% of contracts, upwards in 55% of cases. The CEPC notes that many clauses were designed not to trigger: very high thresholds, very long observation periods.
For each revision, keep the indicator values, their date and their source: this is the data a retailer would use against you, and the data that lets you answer it.
What buyers ask
Is the price revision formula mandatory in the general terms of sale?
No. The law says the general terms of sale may include a formula. However, the annual agreement always includes an automatic revision clause: without a formula in your general terms of sale, that clause is negotiated with the retailer.
Can the retailer refuse the formula in my general terms of sale?
It cannot negotiate it: the agreement takes it over as it stands. It can object to a price change by sending you objective economic data showing that the link between the cost of the materials and your price list is manifestly erroneous.
Which products are covered?
Food products and pet food whose general terms of sale fall under paragraph I of Article L. 441-1-1 of the code de commerce, the French commercial code. Wholesalers and certain products set by decree are excluded.
What are the dates for a supplier with turnover under €350 million?
The agreement is signed by 31 January at the latest instead of 1 March, and the general terms of sale go out two months ahead instead of three. This rule is experimental until 31 December 2029.
Does this apply to a supplier based outside France?
According to the French authorities, yes: the rules on general terms of sale and on the annual agreement apply to any agreement covering products sold in France, whatever the supplier's country (Article L. 444-1 A of the code de commerce). Whether they apply to a contract governed by another country's law is still disputed before the courts and the European Commission. Have your legal adviser check this point.
Can I index on an indicator other than the interbranch organisation's?
The code rural sets the interbranch organisations' reference indicators as the basis, unless another choice and the reasons for it are expressly stated. Have your legal adviser confirm this point before indexing on a market quote or a private index.
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