Price fixing eventually kills that which it meant to save

French bookshops have novel plan to fight VAT rise

Booksellers hint at a possible 'labelling strike' where they would simply refuse to stick new price tags on books

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The French pay the same price whether buying books online or from shops like this one in Paris. Photograph: Francois Guillot/AFP/Getty Images

Behind nine vast window displays of graphic novels, art and politics books, hand-written reviews were tacked to recommended fiction and booksellers greeted customers by name while welcoming passing trade from the neighbouring organic market.

"In London I was shocked to see tables of three-for-two book offers as if they were selling socks," said Karine Henry, co-manager of the Comme Un Roman independent bookshop in Paris's trendy northern Marais. "We're a smiling, cultural service to the neighbourhood – with an added human value you could never get from a website."

France's 3,000 independent bookstores may seem like a literary utopia to small book-traders across the Channel. A French law fixing book prices means readers pay the same whether they buy online, from a chain or from a small bookseller.

Discounting is banned. The government boasts this has saved independents from the ravages of free-market capitalism that hit the UK when it dropped fixed prices in the 1990s.

But all is not well in the world of small French bookshops, as literature becomes a small but significant part of the political row over how to fix France's economic crisis. In Nicolas Sarkozy's second crisis-budget plan, which raised taxes to try to plug the deficit, he raised VAT on books from 5.5% to 7%.

Booksellers' unions are up in arms against the measure, which comes into force in April, warning that their tiny margins could shrink further while they struggle with high rents and business charges.

Selling books in France is one of the least profitable sales businesses, with a far lower margin than the ubiquitous opticians or perfumeries. Other countries, including the UK, exempt books from VAT.

"This sector is fragile and delicate, its margins can't take the hit," said Henry, who was preparing a window display of protest postcards by a major Paris cartoonist. Some booksellers have hinted at a possible "labelling strike" where they simply refuse to stick on new price tags.

The culture minister has ordered an urgent review into how to help small booksellers stay afloat. But VAT on books has become a cultural battleground between Sarkozy, who has fought off charges of being the least cultured French president in history, and the Socialist presidential candidate, François Hollande, who recently misquoted Shakespeare at his first major rally.

Hollande promised to roll back the VAT increase on books, saying "culture should be a political priority".

Guillaume Husson, of the booksellers union Syndicat de la Librairie Française, said: "We're against the principle of VAT on books. Books should be considered a product of necessity in society."

The row comes as the fixed price law has been extended to French ebooks, and small booksellers debate how to compete against the rise of high-street chains and online stores.

A group of independent booksellers recently published an appeal in Le Monde begging French readers to avoid "soul-less global giants".