A new regulation dated March 11, 2015 introduces changes to existing provisions governing advertisement on price reductions targeted at consumers. This ruling allows advertisers to freely choose the reference price within the framework of a price reduction, and thus, under certain conditions, to claim higher reductions.
- The original regulation of December 2008, now repealed, imposed on professional vendors, while aiming to claim a price reduction, to specify within the advertisement the reference price on which the discount was based. This reference price had to be calculated using strict formulae. As an example, the reference price should not “exceed the lowest price charged by the advertiser for a similar article or service [..] during the last 30 days preceding the beginning of the advertisement”’. The advertiser may otherwise opt for the manufacturer’s recommended price as the reference price.
- The recently enacted regulation canceled the provisions relating to the determination of the reference price. As a result, professional vendors are now entitled to choose freely the reference price on which the discount is based.
- However this new freedom to select the reference price is limited in two ways. First, professional vendors must be in a capacity to justify the reality of the discount. Second, the reference price must be fair (i.e., it must comply with professional diligence and not alter or be likely to alter the behavior of the consumer with respect to the product being offered for sale).
Vendor’s announcement on June 1st of a 50% discount on the product price.
Actual sales price of the product varied between €8 and €11 between May 1st and May 31st. The manufacturer’s recommended price is of €10.
The vendor is bound by the €8 reference price (the lowest price charged during the previous 30 days) or €10 (the recommended price).
The offering price, after a 50% reduction, must therefore be €4 or €5
After : The March 11, 2015 ruling now authorizes the choice of a higher reference price, provided it is real, for example €11.
The offering price, after the same 50% discount, could be increased to €5.50.