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  July 2004
 
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  Francisco Balsemão
  Chairman, EPC
  Chairman and CEO,
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  Angela Mills Wade
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  Tel: +322 231 1299

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  Heidi Lambert Communications
  heidilambert@tiscali.co.uk
  Tel:  +44 1245 476 265

PRESS FACT SHEET:

SALES PROMOTION

May 2003

The issue:

DG Internal Market has produced a draft regulation on sales promotion (published in October 2001) It is designed to open up the possibility of running pan-European sales promotion campaigns and to remove some of the protectionist rules which exist in some Member States. It deals with some aspects of pricing but mainly Sales Promotion (marketing). The Commission wants to facilitate the free movement of goods, thereby benefiting consumers and small businesses. Because at present different types of sales promotion are allowed in different Member States, consumers are not reaping the benefits of cross-border price transparency available thanks to e-commerce and the introduction of the euro.

See regulation at http://europa.eu.int/comm/internal_market/comcom/unfair/reg-en.pdf

Position of the European Parliament:

The European Parliament approved a legislative resolution by Eduard Beysen (ELDR, B) on new rules on sales promotions such as free gifts, discounts or the chance to take part in games. A5-0253/2002

Parliament supported the proposal for a regulation as the best way to achieve price transparency, legal certainty and the speedy introduction of uniform rules, needed following the arrival of the euro. However, Parliament amended the proposal so as to allow Member States to decide whether to ban discounts on fixed-price products and on 'sales below cost' (i.e. below the retailer's actual costs). MEPs argue that these discounts are not a form of sales promotion but an anti-competitive commercial practice and hence, under the subsidiarity principle, a matter for national governments.

On 4 September 2002, a European Parliament report on the Sales Promotion Regulation was adopted with wording which allows the possibility for member states and national regulators to limit the prize value of sales promotions as well as the insistence that promoters must "provide sufficient information for any participant in the promotion to understand the likely chance of winning". The EPC and other newspaper organisations pointed out that it can be impossible to provide odds for winning when the number of participants is not known in advance.

Parliament also wants to allow Member States to restrict or ban discounts prior to seasonal sales, believing that this not only serves consumer interests but also helps to prevent unfair trade practices and boost competition. Proposals by some MEPs to change the proposed regulation to a directive, to allow Member States greater flexibility in enacting the detail of the legislation, have been dropped.

An amendment which could have outlawed the use of 'happy hour' was defeated in the Legal Affairs Committee. The defeated amendment would have banned the use of sales promotion in respect of tobacco, alcoholic beverages and pharmaceutical products. Other amendments go further than the Commission in safeguarding children's health and protecting minors from the sale or promotion of alcohol. Yet other changes tighten up and clarify the text and put back the entry into force of the regulation by one year to 1 January 2005.

EPC Position:

The directive is intended to deal with sales promotions rather than the general rules affecting offer for sale so discounts on newspaper cover prices will not be affected (unless amended by the Council in this regard). The regulation is generally helpful to publishers, especially those with multi-national markets. The proposal will remove the limit on discounts (which currently vary throughout the EU). It will also ensure free entry to competitions (to ensure that “no purchase” is necessary).

Timing:

  • Greece lists Sales Promotions as one its consumer issues priorities during its 2003 Presidency

Latest:

The draft Regulation to create a single market in sales promotions is in danger of being de-railed by national self-interest as Member States try to agree a final text. The draft Regulation was presented to the Competitiveness Council on 19 May. The Greek Presidency has steered the regulation through some difficult times but France Germany and worryingly the incoming President Italy are trying to remove the country of origin clause in order that they can continue protectionist measures in their home markets. The Sales Promotion Regulation is becoming a test case for an internal market approach to advertising and marketing practices. The outcome of this development could affect the future course of a whole range of measures affecting the way in which companies advertise and promote their businesses across Europe. EPC will be contacting Ministers across the European Union to explain their concerns.

Key players:

Lead EP Rapporteur: Ward Beysen, MEP - ELDR
Shadow Rapporteur: Ms Thyssen MEP - PES
Commissioner Bolkestein

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For further information FOR JOURNALISTS on this or other topics, please contact Heidi Lambert Communications on Tel: +32 2 732 5546 or hlc@skynet.be.

FOR EPC MEMBERS AND GENERAL ENQUIRIES please contact Angela Mills on Tel: 00 44 1865 310 732 or angela.mills@epceurope.org.

 
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