Commission Communication on sales promotion in the internal market.
Draft Regulation on sales promotion in the internal market.
||Article 95 (1) EC; co-decision; qualified majority voting
||2 October 2001|
|Forwarded to the Council:
||5 October 2001|
|Deposited in Parliament:
||18 October 2001|
||Trade and Industry|
|Basis of consideration:
||EM of 1 November 2001
|Previous Committee Report:
||None; but see (17226) 7595/96: HC 51-xxiii (1995-96), paragraph 10 (26 June 1996)
|To be discussed in Council:
||No date known|
||Legally and politically important
12.1 In l996 a survey conducted by the Commission
resulted in a Green Paper on Commercial Communications.
This concluded that outmoded and differing national legislation
created legal uncertainty for companies and was a barrier to sales
promotion within the EU. The Green Paper was followed two years
later by a Commission Communication
which identified sales promotion as a priority area for Community
legislative action. Both the present Communication and the draft
Regulation arise from the previous surveys.
12.2 The document identifies eight forms of sales
(iii)coupons and vouchers;
(iv)free gifts, i.e. gifts offered unconditional
(v)premiums considered to be offers other than discounts
which are provided to the consumer once the latter has ordered
or bought the promoted product or service;
(vi)promotional contests involving questions to consumers,
the answer to which require certain skills;
(vii)promotional games where the winner is designated
by chance and where no payment is required to participate; and
(viii)promotional games where the winner is designated
by chance and where no payment nor obligation to buy is required
It looks at the reasons for
differences in treatment between Member States, which reflect
their policies on consumer protection and protection against unfair
12.3 Under the heading, 'necessity for community
action', the Communication lists the types of services likely
to be affected by differing rules in Member States. These include
advertising agencies, media such as the radio and press, media
sales services, direct marketing operations, retail services and
customer relations services.
12.4 Numerous examples of difficulties are given.
One concerns loyalty cards: new-entrant retailers who wish to
operate a marketing strategy based on loyalty cards are prevented
from doing so in some Member States. Similarly, small and medium-sized
enterprises which wish to enter a market by offering "two
for the price of one" promotions or by direct marketing of
premium offers are sometimes unable to do so.
12.5 According to the Commission, issues to
be addressed include:
the protection of
children and minors, e.g. some Member States prohibit direct marketing
aimed at children or free alcohol drinks aimed at the same group;
the information required for discount sales;
retailers need clarity as do consumers so that they can better
compare products and services;
provisions relating to discounts, premium
promotional contests and games need to be open and transparent;
non-legal/judicial measures are also required
in order effectively to protect consumers without hampering sales
12.6 Article 3 of the draft Regulation provides
that Member States shall not impose:
a general prohibition
on the use or commercial communication of a sales promotion unless
required by Community law;
a limitation on the value of a sales promotion
except for discounts on books;
a prohibition on discounts preceding seasonal
a requirement to obtain prior authorisation,
or any requirement having equivalent effect, for the use or commercial
communication of a sales promotion.
It also prevents them imposing restrictions on the
provision of services or free movement of goods on the grounds
of the use of sales promotions.
12.7 Article 4 requires promoters to make certain
information on the promotion available to clients on request.
Article 5 makes provision in respect of the protection of children
and adolescents. Article 6 provides for redress by promoters in
case of complaint, and is intended to facilitate cross-border
The Government's view
12.8 In her Explanatory Memorandum the Parliamentary
Under-Secretary of State for Competition, Consumers and Markets
at the Department of Trade and Industry (Miss Melanie Johnson)
"The Government considers
that it is in the UK's interest to support measures taken by the
Commission to remove barriers to the free movement of services,
including commercial communication services, in the European Union.
These are consistent with UK policy in this area. The prohibition
of restrictions on the use of sales promotion in the EU will enable
UK companies to market their goods and services more widely and
more efficiently in the EU. Consumer choice and competition will
increase as more EU markets make use of sales promotion, and UK
suppliers and consumers will benefit from improved access to those
12.9 We agree with the Government that harmonised
sales promotion rules will promote a more open Internal Market
which will benefit UK companies and consumers. We note that the
draft Regulation contains provisions on the protection of minors.
We clear the document.
53 (17226) 7595/96; see headnote to this paragraph.
Commercial Communications are any form of communication designed
to promote, directly or indirectly, the goods, services or image
of a company, organisation or person pursuing a commercial or
craft activity or exercising a regulated profession - in short
advertising, marketing, sponsorship and sales promotion. Back
6842/98; see HC 155-xxvi (1997-98), paragraph 20 (29 April 1998). Back