French Minister Floats Possibility of Cap on Meal-Voucher Commissions

By Helena Smolak

Shares in meal-voucher issuers, Edenred and Sodexo, experienced a decline following remarks by France's Minister for Small and Medium-Sized Enterprises, Commerce, Crafts, and Tourism, Olivia Gregoire. The minister announced an antitrust review into commission rates in the meal voucher market, stating that the current rates of 3% to 5% are burdensome for restaurants.

Stock Performance

Following this announcement, Edenred saw an 11% drop in its shares, closing at EUR52.78. This marks their largest one-day percentage decrease since March 2020. Similarly, Sodexo experienced a decline of 3.3% to EUR94.34 in their shares.

Potential Commission Cap

If the review reveals market malfunctions before 2026, the French government plans to introduce a cap on commissions. However, it is uncertain whether this cap will ever come into effect.

Response from Companies

Edenred defended restaurant commissions, asserting that they are fully justified and a result of fair competition and negotiation with restaurant owners. Sodexo did not provide any comments when contacted.

Analysts' Perspectives

Bernstein analysts Harry Martin and Alice Rose Buckley stated that both Edenred and Sodexo would be exposed to potential commission rate caps. However, they also mentioned that the market reaction may have been exaggerated. Bernstein estimated that less than 8% of Edenred's earnings before interest and taxes would be at risk, while for Sodexo, the exposure would range between 3% and 4%.