Two tries from Lelia Masaga and 17 points from the boot of Stephen Brett were enough to end the hopes of the England Under-21 team in Vichy.
Tries from James Haskell and Topsi Ojo at the Stade Darragon, both converted by Toby Flood, kept England in the hunt but they were unable to close the gap.
Coach Jim Mallinder said: "We started well, putting them under pressure.
"Unfortunately we couldn't finish and once we were behind we started to panic and they punished us."
Round Two results:
Ireland 22-26 Argentina
Australia 45-24 Fiji
England 14-29 New Zealand
South Africa 102-17 Georgia
Wales 3-32 France
Italy 10-26 Scotland
England U21 team: Mike Brown (Harlequins), Topsy Ojo (London Irish), Anthony Allen (Gloucester), Toby Flood (Newcastle), Paul Diggin (Northampton), Ryan Lamb (Gloucester), Danny Care (Harlequins); Alex Rogers (Harlequins), Chris Brooker (Bath), David Wilson (Newcastle), Richard Blaze (Worcester), Tom Croft (Leicester), James Haskell (Wasps), Michael Hills (Sale), Jordan Crane (Leicester - capt)).
Replacements: Rob Webber (Wasps), Mark Lambert (Harlequins), Tom Ryder (Saracens), Chris Robshaw (Harlequins), Ben Foden (Sale), Uche Odouza (Worcester), Matt Riley (Sale).