European Parliament OKs Draft Promo Bill

05 September 2002

The European Parliament in Strasbourg on Wednesday ratified a draft bill that will standardize the rules governing pan-European sales promotions and loyalty programmes [WAMN: 22-Aug-02].

The bill, however, is far from set in stone. It must now be approved by all fifteen member states – and few in the promo industry believe there will not be some tough horse-trading along the way.

As it stands, explains a spokesperson for the European Parliament: “The main idea … is to block member states from imposing any prohibitions on sales promotions. The only major exception is sales below-cost. There, the member states will be allowed to keep national legislation.”

The exception is a tradeoff with those states, Germany in particular, where below-cost sales are perceived as anti-competitive commercial practice rather than sales promotion.

Until the bill passes its final hurdle, Europe will continue to be a morass of conflicting rules on price promotion. Currently, French retailers are banned from selling items at less than cost price, while in Denmark there are strict rules on the use of coupons. Italian retailers are required to notify the Ministry of Finance of every sales promotion.

Warned the parliamentary spokesperson: “The draft text was approved but it can still take months. Parliament wants this to enter into force by January 1 2005 but the Commission still wants it to start one year earlier.”

Data sourced from: BrandRepublic (UK); additional content by WARC staff