Responding to political pressure and the threat of a windfall tax, the CMA CGM Group announced that it would extend its rebates to French shippers and exporters as part of an effort, according to the shipping giant, aimed at to support the purchasing power of French households. Today’s announcement expands the discounts previously announced by the carrier and came after the company’s chief executive spent two hours before a French Senate committee defending his company.
Attention focused on CMA CGM which reported net profit of nearly $18 billion in 2021 followed by a tripling of its first quarter net profit to $7.2 billion while France, like most developed countries, is struggling with runaway inflation and the effects of the Russian invasion of Ukraine. Government officials had singled out CMA CGM, TotalEnergies and Engie saying the time had come for a temporary windfall tax of up to 25% to help struggling French households.
Last month, French Finance Minister Bruno Le Maire went on television to discuss the merits of a windfall tax. He underlined that “a small number of companies have made profits during the crisis in sectors such as energy or transport… I want them to make me strong proposals so that they donate part of their benefits to the French”.
While CMA CGM and Total had announced plans to offer discounts in France, Le Maire said their efforts were not enough.
Rodolphe Saadé, Chairman and CEO of CMA CGM, spoke for two hours on Wednesday July 20 before the Commissions for Economic Affairs and Planning and Regional Planning to share his vision of the maritime and logistics industry. depending on the company. The media, however, said he was forced to defend the company and its profits by stressing the strategic importance of the maritime group for France. He reportedly told lawmakers that a profit tax would put pressure on the company as it seeks to invest in its operations for the good of France. He pointed to the company’s actions while saying it should look at its competitors because the tax would make CMA CGM less competitive in global markets.
“Faced with the current context of inflation, the group has decided to strengthen its commitment made on June 30 to directly support the French economy and French households,” said the CMA CGM Group in a press release released in France on Friday July 22. . increases both the scope and size of previously announced discounts and provides an additional discount to exporters.
The original plan offered the 14 largest French retail chains a reduction on freight rates for 40-foot containers of €500 on all imports from Asia and a similar reduction for all imports to the DOM-TOMs. The company indicated that it would be a discount of 10% for imports into France and 10 to 20% depending on the destination in the DOM-TOMs.
In the face of political pressure, public opinion and new negotiations negotiated by Le Maire, CMA CGM announced today that the discounts will be extended to €750 per container for all imports from all customers in France and for imports into overseas territories. In addition, they also announced a reduction of €100 for each 40ft container of French exports. The company said this represents a discount of up to 25%. The program begins August 1 and continues for one year.
CMA CGM stressed that it is essential that these reductions are reflected in the price of products to the consumer. They called on the government to ensure that the discounts reach consumers. The scope of the relief, the company said, had been defined in consultation with the Ministry of the Economy, Finance and Industrial and Digital Sovereignty, and was the subject of discussions with the group’s customers and certain federations. , including the CPME (Confederation of Small and Medium Enterprises).
TotalEnergies also responded to the government’s announcement of fuel price cuts until the end of the year. Reports said lawmakers were happy with the latest ruling and planned to withdraw an amendment that called for the windfall tax.