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Carrefour faces 'record' $215 mln fine request

STORY: France’s finance ministry has asked a court to fine retailer Carrefour a recommended $215 million.

It said the penalty is over contracts with franchise stores that the ministry says were unbalanced in Carrefour’s favor.

In a statement on Tuesday (June 18), the ministry's watchdog said its investigations had found several companies in the group engaging in practices contrary to the French Commercial Code.

The watchdog said it asked the Commercial Court in Rennes to declare several clauses of the contracts null and void, and to impose a financial penalty on the group.

The ministry's complaint is part of the proceedings brought by nearly 170 franchisees at the end of 2023, the watchdog said.

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Carrefour denounced the move, called the amount of the fine unfounded and contested the ministry's "grievances.”

It said that the ministry was intervening in a dispute that began several months ago without providing new information on the merits.

The French retailer also said it had "full confidence" in its ability to demonstrate the validity of its contracts.

The statements confirmed a report from a French daily newsletter which published a legal complaint from the ministry on Monday. It claimed Carrefour's contracts with franchisee stores contained "a significant imbalance."

This legal document recommended a $215 million penalty, which the news outlet said was a "record civil fine."

It also demanded 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.

Carrefour shares hit their lowest price since 2020 in early trading - but regained some ground later in the day.