Brussels, 02/10/2001 (Agence Europe) - The European Commission has adopted a proposal of regulation aimed at lifting the obstacles on sales promotion, such as discounts, premiums, gifts, competitions and other promotional games. As indicated in EUROPE of 29 September, p.16, the regulation will eliminate general restrictions applied by Member States. According to the principle for the recognition of rules as decreed by the "State of origin", a Member State may nonetheless continue to apply restrictions for its national companies, but will not be able to impose them on companies from another State operating on its territory. The regulation also provides rules for protecting minors and for consumer information: indication on the amount of discount, price of promotional "gifts", the opportunity to win in promotional games, etc.
Covering different kinds of service activities (companies specialised in the conception of sales promotion, direct marketing, customer relations services, etc.), promotion represents around EUR 40 billion in investment in the nine Member States where a survey was conducted, states the Commission. The proposal had been prepared by a group of experts along the lines of the 1998 Green Paper on "commercial communications". It called for a joint Commission and Council statement on the adoption of the directive on electronic commerce.
The regulation would eliminate around fifteen restrictions, including the ban on sales at a loss that exist for example, in France; the thresholds for discounts (limited to 33% in Belgium, for example), or compulsory sales dates. "According to a study carried out in Ireland, the ban on sales at a loss runs counter to the interests of consumers", assured one Commission expert. In order to avoid abuse of dominant positions and to verify the application of competition rules, traders should indicate that they are selling at a loss, states the same source.
The Commission also considers that the Member States cannot ban price reductions outside sales periods. These restrictions result, in practice, in encouragement to traders to inflate their prices before the sales, and the main operators to adopt anti-competitive behaviour", the Commission notes in its communication.
The principle of "mutual recognition" will allow States to continue to apply sectoral restrictions but only for their national companies. In other terms, France will continue, for example, to apply the Evin law on alcohol advertising to its companies, but not to companies of other States operating in France. On the other hand, the rules on the protection of minors will ban the distribution of alcohol samples to minors. "According to our legal experts, the restrictions on tobacco marketing should be covered by the draft directive on tobacco advertising presented in May 2001, assures the Commission.
According to the Commission, this regulation seeks to "lift the uncertainty resulting from different interpretations and implementation of the provisions at national level". It "establishes a clear and modern regulatory framework to guarantee legal security, with a view to facilitating crossborder activity and the communication of sales promotions".