French firm Carrefour taken to court over 'illegal practices' claim

French multinational group Carrefour is being taken to court by a French union over alledged illegal practices.
French multinational group Carrefour is being taken to court by a French union over alledged illegal practices. Copyright AP Photo/Bob Edme
Copyright AP Photo/Bob Edme
By Euronews
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The CFDT union believes the French multinational retail company is indulging in "illegal practices" in connection with its franchised stores.

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Carrefour has more than 12,000 stores across the world, with about 5,000 in France alone. Since 2018, some 300 stores have become franchises and the trend looks set to increase.  

The French union CFDT claims resorting to franchises en masse leads to major disadvantages for staff.

Although still operating under the Carrefour banner, franchised employees do not enjoy the protection of a multinational company and its strong unions, which can result in them losing previously acquired advantages. The union said that the franchise system has resulted in workers' annual earnings dropping by more than €2,000.

It claims Carrefour should not have been allowed to franchise additional stores because they - the franchises - are supposed to be a boost to a company's development, not a way of bypassing a proper restructuring by transferring the risks to franchisees.

The union has also expressed anger about Carrefour's financial distribution of its profits, which last year allowed for €481 million of dividends to be cashed in by its shareholders.

The retail giant has defended its business practice, saying it meant that many of its supermarkets had been able to avoid bankruptcy.

Carrefour's number of franchises increased after Alexandre Bompart took over as the company's CEO in 2017. Since then, the company has tried to cut its spending, mainly by downsizing its workforce through redundancy and an increase in franchises.

Franchises have effectively allowed Carrefour to cut down its staff by 23,000 employees since 2018.

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