For one year from August 1, 2022, a discount of €500 per container, equivalent to a discount of about 10 to 20 percent, will be offered to large retailers in France for imports and all goods destined for French overseas territories, according to a notice from CMA CMA, the world's third largest container shipping line. As a practical response to the government's call to support the purchasing power of French households in the face of rising inflation.

Active or passive

The French finance minister said clearly in an interview with the media: "For the small group of companies that have made fortunes in this crisis, such as energy and logistics, I hope they will give a strong commitment to transfer some of their profits to the French people. If they choose not to do more, we will do our part."

Analysts believe CMA CMA's seemingly patriotic announcement of lower domestic shipping rates is merely a pre-emptive move by the French government to offset the possibility of a windfall tax on "super" profits. The subtext is to "not be sanctioned" and take the initiative in their own hands.

There is also a more cynical view gaining traction in France, where there is growing unease that some of the country's leading businesses have shown exceptional prosperity due to disruptions in global trade and international supply chains caused by COVID-19, as well as economic turmoil caused by the Russia-Ukraine war.

CMA Field with impressive performance

France's inflation rate continued to rise in June, hitting a record annual rate of 6.5%, according to preliminary statistics from the National Institute for Statistics and Economic Research (INSEE). Prices in France rose 0.8 percent in June from May, mainly due to a sharp rise in the cost of goods such as food and energy caused by the conflict with Ukraine.

In 2021, CMA CMA made a profit of 16 billion euros ($16.3 billion), a tenfold increase from the previous year. However, it paid only 325m in tax because it was taxed not on turnover but on net tonnage. In the first quarter of 2022, CMA CMA posted a net profit of $7.2 billion, again outpacing its main Marine rival.

A maze of views

Speaking recently on the evening news of French television channel France 2, Philippe Dellebecq, president of the French Maritime Law Association, said: "[Tax] rules in favour of French shipowners benefit about 70 percent of operators in the industry worldwide, whether in Japan, Hong Kong or elsewhere. So this measure is not aimed at France, it's just a way to level the playing field in the sector."

Le Journal de la Marine Marchande, a French shipping publication, calculated that the three European shipping companies benefiting from the tonnage tax paid between 0.7% and 3.7% in 2021, compared with 25 to 30 times higher if they were subject to the general corporate tax system.

The issue of taxing excess profits is divisive among French MPS. One wants to propose taxing "windfall" gains at two-thirds of the tax rate. However, the French president and his party are worried about the impact on France's competitiveness.

Questions have also been raised about the legality of the CMA CGM discounts and whether they violate EU competition rules.

No one was immediately available to comment on the French shipping company. However, a spokesman for the French economy ministry appeared to dismiss the "legitimacy" argument. "Like most prices in a market economy, sea freight prices are free to move up and down."

A commission spokesman was unable to comment on whether CMA CGM's move complied with EU competition rules. The Commission is said to be aware of and monitoring developments in the freight market.