ACS

France's renowned butchers, bakers and grocers say they are being threatened by a new law that makes it easier for large supermarkets to open anywhere.

Until now, small shop owners have been protected by a 1996 law that makes it difficult for supermarkets to open stores bigger than 3,250sq ft. However, this limit would be all but scrapped as part of a new law on "modernising the economy" tabled yesterday and to be debated in parliament next month.

Supermarket chains have welcomed the move. However, Philippe Pilliot, the secretary general of the French Greengrocers' Federation, said the effects could be devastating for small businesses.

"A village grocer can only survive if it serves a radius of between five to 10 kilometres or 2-3,000 people," he said. "It will simply die out if a supermarket opens in that zone.”

Mr Pilliot, who represents 28,500 greengrocers, went to the French National Assembly yesterday to lobby to have the measure removed. The aim of the law - President Nicolas Sarkozy's second major economic reform since taking office - is to boost economic growth by 0.3 per cent annually and create 50,000 jobs in five years by making it easier to set up businesses.

It also aims to increase competition. A recent consumer group survey found that supermarket prices in France are five per cent higher on average than elsewhere in Europe, because individual stores enjoy quasi-monopoly status in many parts of the country. The new law would allow supermarkets of up to 10,500sq ft to open anywhere they wanted.

"We want more businesses and more competition for lower prices," said Christine Lagarde, the finance minister. She argued that the current rules had both failed to protect small shopkeepers and, at the same time, forced the public to pay artificially high prices.