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Shortages in France – which items are affected

The global economic recovery following Covid-related disruption has lead to disruptions in the supply chain around the world, and France is no exception. These are the items that are in short supply in France.

Employees work at an IKEA warehouse in Saint-Quentin-Fallavier. IKEA France has reported problems getting products to its shelves.
Employees work at an IKEA warehouse in Saint-Quentin-Fallavier. IKEA France has reported problems getting products to its shelves. Photo: JEFF PACHOUD / AFP.

There have been no reports of food shortages – or anything else affecting supermarket shelves – or petrol in France, unlike in the UK.

But if you’re in the market for a new car, or planning renovation work on your home, you are likely to feel the effects.

These are the industries currently suffering from shortages, and what they mean for you.

Car industry

Most people had never heard the word “semiconductor” until recently, but now it’s inescapable. You never know what you have until it’s gone.

These microchips are essential for everything in modern vehicles from anti-lock braking systems to airbags to parking assistance technology. But a global semiconductor shortage has put the industry on hold, especially as car manufacturers must compete with other industries including smartphones and games consoles for the chips.

Last month, European new car sales fell to their lowest level for a month of September since 1995 as a global shortage of semiconductors hit supply. Sales in France were down by a fifth compared to September 2020.

The result has been factories on hold and subcontractors having to put workers on furlough, meaning buyers are having to wait longer for their cars to be ready, often up to six months.

French manufacturer Renault, meanwhile, has begun selling its Clio, Captur and Arkan models without the option of wing mirrors which fold in electronically, L’Argus reported earlier this month. Buyers have been told to bring their vehicles to a workshop to have the electric mirrors installed once the components are ready.

Disruption to the supply of new cars has had a knock-on effect on the used car market, too, as more people look to buy second-hand, and fewer people trade in their old cars, meaning you could have to pay more for a used vehicle.

Construction

In the construction industry, disruption to supply has combined with a rising demand for home renovations to lead to a steep rise in prices and concerns over potential delays to building work. If you are planning to undertake building work on your home, you may have to pay more for the job and wait longer than usual.

A study by the Confederation of Crafts and Small Building Companies (Capeb) last month found that 57 percent of small building companies had noticed disruptions to supplies, and 76 percent reported a rise in prices.

Capeb president Jean-Christophe Repon told Libération that “nobody is guaranteeing a quote price for more than six months anymore”.

Among the materials affected are steel, copper, PVC, and timber. The timber industry has had to raise prices by 8 to 15 percent in the past year, Repon told Ouest France, “and even up to 20 percent for timber-framed houses”.

READ ALSO French building boom leads to shortage of builders for property renovation projects

Decorations

It’s not just large building sites or significant home improvement projects which have been affected – it has also become more difficult to find the little things to spruce up your home.

In line with trends in its stores across the globe, Ikea France confirmed to Les Echos on September 27th that 20 percent of its products were missing from its aisles. Of that, 15 percent concerned smaller articles, while 5 percent referred to furniture. The supply-chain problems are reportedly due to transportation difficulties, from a lack of shipping containers to an insufficient number of lorry drivers.

Since the spring, there have also been regular reports of paint shortages.

Publishing

Unsurprisingly, a shortage of wood also means a shortage of paper. Due to the slowing down of the production of paper pulp, the raw material used to make paper; disruptions to international trade; and the fact more producers are using pulp to make cardboard instead, French publishers are facing increased prices and longer delivery times.

“My father created the Corlet printing company in 1961, and he never saw shortages like the ones we’re experiencing today!” Jean-Luc Corlet, CEO of the family company, told Le Monde.

“The prices have doubled. Shipping times have gone from two to eight weeks,” Wilfried Souchet, commercial director at Riccobono Imprimeur, told Libération.

While there are no price rises on the immediate horizon, this could affect publishers’ ability to reprint books that are selling unexpectedly well, RTL reports.

And while the cost of producing toilet paper has also risen, there are currently no suggestions of a shortage, so there is no reason to go out panic buying.

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PROPERTY

French property: What is buying ‘en tontine’?

If you're buying property in France, you might be thinking about buying 'en tontine' - this has advantages especially when it comes to France's strict inheritance laws, but can also have tax implications.

French property: What is buying 'en tontine'?

What is it?

The ‘clause de tontine’ sometimes also known as a ‘clause d’accroissement’ is a clause that is inserted into the property deeds when you are buying a house or apartment.

It can only be inserted during the purchase, and cannot be added later.

It’s basically a ‘group purchase’. It’s most commonly used by unmarried couples who are buying together but it can be used by larger groups too – for example a group of friends buying a holiday home together.

You will have to ask a notaire to draw up the tontine clause during the property purchase and it can only be used if 

  • the parties are equally involved in the financing of the purchase
  • the parties involved have a roughly equal life expectancy (for this reason tontine clauses may be rejected if there is a significant difference in age between the purchasers)

What’s the point of it?

The main reason that people use it is to sidestep France’s strict inheritance laws, which assign that a certain portion of every estate must go to children, at the expense of a partner. 

READ ALSO How France’s strict inheritance laws work

For this reason it is particularly used by couples who have children from previous relationships.

On a property with a tontine clause in effect, when one owner dies their share of the property passes in its entirely to the other member/members of the tontine.

This cuts out children from inheritance, but means that a surviving partner is not evicted from their home in favour of the children of the deceased. 

It also has the advantage of making the intentions of the deceased clear, to avoid arguments among heirs after their death.

It should be noted, however, that the tontine clause only takes in the property that it covers – other assets may be subject to French inheritance law so it’s therefore probably wise to arrange a will, to ensure your wishes for your estate are met.

The surviving party can ask a notaire to update the property deeds to show that they are the sole owner, if they want. Be aware there will be a fee, which could reach four figures for the privilege – and it doesn’t actually involve any change to the property title.

Drawbacks

The advantages of the system are clear, especially for blended families, but there are some potential drawbacks too, which mean that anyone considering buying in this way would be well advised to take proper legal advice before they start.

Inheritance tax – while a tontine will help you to avoid restrictions on inheritance, it does not exempt you from inheritance tax. French inheritance tax is structured according to your relationship to the deceased, and people who are neither married nor related to the deceased pay an eye-watering inheritance tax rate of 60 percent.

The only exception to this top rate of inheritance tax is if the property is your main residence and it is valued at under €76,000 – in that case, tax is paid at a rate of 5.8 percent.

Married couples and family members pay a much lower rate or not tax, but if you’re not married to your tontine co-purchaser, be careful that you’re not lining yourself up for a massive tax bill in future years.

Wealth tax – depending on the value of the property, it could tip you over into the ‘wealth tax’ category when you inherit. France’s wealth tax is a real estate based tax and is levied on anyone who has real estate assets (property and land) worth €1.3 million or more.

The calculation includes property held en tontine.

Tax savings – you might hear tontines being advised as a way to limit your French tax liability.

While this used to be true, changes to tax laws means there are no no significant tax advantages to buying this way – the same is true for buying a property via an SCI, which used to represent a tax saving until the law was tightened up.

Disinheriting family membersOne side effect of the tontine clause on mixed families is to effectively disinherit any children of the first person to die.

Because the property passed to the survivor, under French law, only their direct descendants – rather than any family by marriage – are entitled to automatic inheritance.

That means that the children of the surviving partner will be entitled to the statutory share of the entire asset (between 25 and 30 percent depending on the number of children), but the children of the first person to die will be entitled to nothing. Obviously you can choose to leave them something in your will, but you can only leave them some or all of the estate which is not automatically given to the children on the survivor.

Divorce/dispute – if the members of the tontine split up or (in the case of friends) fall out, then they can either sell the whole property or agree to buy each other out.

However, if one party refuses to sell, then you have very limited legal options – unlike a standard property purchase a tontine is not regarded as joint ownership, so one partner cannot be forced to sell as part of a divorce procedings, for example.

Basically the tontine can only be ended or changed with the agreement of all parties – so if you can’t agree between yourselves then you may be stuck with it.

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