From 1 January 2023, new rules for communicating rebates will apply. There is much ambiguity and debate surrounding these new rules. They may have unintended consequences for retailers' rebate policies. Reason to highlight the main points.
The Modernisation Directive adds Article 6a to the Price Indication Directive. An announcement of a price reduction must indicate the lowest price applied over the past 30 days. This will prevent price deception: traders first raising prices and then giving a non-existent 'discount'. The ACM previously stated that a 'from/for price' is only allowed if the product was actually sold for the stated 'from price' within the past 3 months. So now there will be legal rules on this.
In the Netherlands, the lowest price over the past 30 days does not always have to be stated. Section 5a of the Dutch Price Indications Decree lists the following exceptions:
(i) For products with a 'best before' date, the selling price immediately prior to the price reduction may be indicated.
(ii) For progressively increased price reductions (i.e. reductions that increase incrementally), the selling price may be declared without price reduction.
(iii) The obligation does not apply to products that have been on the market for less than 30 days.
In addition, the obligation does not apply to loyalty programmes, real personalised price reductions or combined/linked conditional offers. But it is unclear what is or is not covered by these.
The question also arises how 'from/for' offers should be presented. Should the from price always be the 30-day price or can (also) other reference prices be used?
Price actions may be unintentionally constrained by the new rules. Hopefully there will be more clarity before the new rules (with no transition period! ) take effect on 1 January 2023. In any case, retailers would do well to take a close look at their pricing policy this year to check whether it complies with the new rules. Of course, we are happy to think along - we even have a fun and informative workshop on offer!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
