European sales promotion restrictions to be harmonised

EU Commissioners have endorsed a proposal for an EU-wide law designed to remove national restrictions on sales promotions and promote cross-border trade of goods and services.

At present, sales promotions are regulated very differently across member states and the divergences between national regulations have inhibited cross-border sales promotions.

Policy makers believe that an EU-wide Regulation will respond to the need for directly applicable legislation which is identical and certain throughout the EU.

The main features of the Regulation are as follows:

  1. General bans and restrictions on the use or commercial communication of sales promotions are prohibited.  For example, a number of member states currently ban premiums and participation in promotional games subject to purchase.  Others limit the value of discounts and free gifts.  Such restrictions have long been considered disproportionate and are to be replaced with less restrictive and more transparent requirements.
  2. Information requirements have been tightened and modernised in an attempt to ensure greater consumer protection.  Not only is information to be provided in the commercial communication of the sales promotion (including an indication of the discount, free gift or premium etc, the price of the promoted goods and the promoter’s identity), but information must be made available to customers on request as soon as the relevant sales promotion is launched.
  3. There is to be increased protection for children and adolescents.  For example, collecting personal data from a child will not be allowed without prior parental consent.  The Regulation also restricts the supply of free gifts to households, ensuring that goods do not pose a danger to children’s health, and bans the offering of free gifts of alcoholic drinks to individuals under the age of 18.
  4. The Regulation aims to implement a cross-border complaints system which will help ensure that foreign customers benefit from the same level of protection and redress as domestic customers.  Under the terms of the proposal the promoter will be required to provide an address to which complaints can be directed and to verify, at the request of a national court, the accuracy of information provided in respect of sales promotions.

The proposed Regulation has been welcomed by the advertising community who view it as a necessary step in enabling pan-European promotions.  From a UK perspective, if the Regulation makes it into national law, one of the effects will be to imbue aspects of the current UK Sales Promotion Code (many of whose provisions are replicated in the information provisions of the draft Regulation) with the full force of law.

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