The regulatory framework for the conduct of cheap sales in Malaysia will liberalised when the Trade Descriptions (Cheap Sale Price) (Amendment) Regulations 2019 (‘Amendment Regulations’), which were gazetted on 29 November 2019, come into operation on 2 January 2020.
Among the amendments that will be made to the Trade Descriptions (Cheap Sale Price) Regulations 1997 (‘Principal Regulations’) pursuant to the Amendment Regulations are the following –
- The requirement under regulation 3(1) of the Principal Regulations to give notice of a cheap sale to the Controller, Deputy Controller or Assistant Controller of Trade Descriptions will only apply in respect of a cheap sale which has a duration of more than three days; regulation 3(1) of the Principal Regulations presently requires notice to be given to the Controller, Deputy Controller or Assistant Controller regardless of the duration of a cheap sale;
- The period of the notice to be given to the Controller, Deputy Controller or Assistant Controller of an intended cheap sale under regulation 3(1) will be reduced from 14 days to one day’s prior notice;
- The existing requirement that any notice of withdrawal of a cheap sale is to be given not less than seven days before the commencement of the cheap sale will be reduced to one day;
- The number of cheap sales that can be conducted in a calendar year will no longer be limited as regulation 5 of the Principal Regulations which limits the number of cheap sales to four in a calendar year will be deleted;
- The existing regulation that limits the duration of a cheap sale to 30 days or such duration as may be determined by the Controller will be amended to a maximum period of 31 days through an amendment to regulation 6(1) of the Principal Regulations;
- A person who wishes to extend the duration of a cheap sale to more than 31 days will be required under a new regulation 6(1A) of the Principal Regulations to issue a notice to the Controller, Deputy Controller or Assistant Controller under regulation 3(1) and to offer and supply the goods at a sale price which is lower than the price previously offered or supplied;
- The requirement that the goods under a cheap sale must to be offered and supplied at a price which is not less than a 10% discount from the price previously offered or supplied will be removed by the deletion of regulation 6A of the Principal Regulations;
- The requirement that at least 50% of the goods displayed at a business premise must be made available for sale at a cheap sale will be removed with the deletion of regulation 7 of the Principal Regulations;
- Regulation 8(3) of the Principal Regulations presently provides that the expression “price at which the goods were previously offered or supplied” means, inter alia, the lowest price at which those goods were offered or supplied during a continuous period of not less than 28 days immediately preceding three months before the commencement date of the cheap sale. This regulation will be amended so that the expression “price at which the goods were previously offered or supplied” will instead refer to the latest price of those goods before the commencement of the cheap sale;
- The requirement to display the notice issued under regulation 3 at a conspicuous place at the venue of the cheap sale will be dispensed with by the deletion of regulation 12A of the Principal Regulations;
- The requirements of the information to be included in an advertisement of a cheap sale under regulation 13 of the Principal Regulations will be liberalised; it is however to be noted that an amendment to regulation 13(2) will make it an offence for a person to make any false or misleading statement in any cheap sale price advertisement relating to goods.
- A new regulation 14(d) will be introduced into the Principal Regulations to exempt a person from the Principal Regulations if such person reduces the price of his goods after obtaining the approval from the Controller by a written application; and
- The form of notice in the First Schedule of the Principal Regulations will be deleted. Presumably the Ministry will come out with replacement forms to guide persons who propose to conduct cheap sales.
While it is desirable to allow stakeholders to determine the most effective methods of conducting cheap sales, it is hoped that the freedom that will be given to stakeholders under the Amendment Regulations will not be abused by unscrupulous parties.