A new law was signed into effect on the 28th of November 2022 around product pricing that retailers in Ireland need to be keenly aware of. The law, known as the ‘Price Indication Directive’ was an amendment to the European Union Requirements to Indicate Product Prices Regulations 2022. It is being enforced in Ireland by the Competition and Consumer Protection Commission (CCPC).
What change will the new EU price indication directive bring?
The key change of the EU price indication directive is in relation to price reductions. The new legislation requires businesses to increase transparency around reduced prices. This change comes amid growing skepticism among consumers over promotions such as Black Friday. A recent survey by the CCPC reported in the Irish Examiner found that over half of those surveyed in Ireland do not trust retailers on whether the discounts displayed in stores and on websites are real.
The key elements of the new legislations are outlined by the CCPC as follows:
- Businesses selling to EU customers will have to show the prior price of a good in the price reduction announcement.
- The prior price is defined as the lowest price applied in the previous 30 days before the price reduction was applied.
- Retailers will need to base any reduction amount on the prior price.
- The announcement must be easily identifiable as referring to the relevant goods, be clearly visible and easy for consumers to read.
- In the case of a sales campaign where there are successive reductions in the price, the prior price you show should be the lowest price before the first of the price reductions was applied.
How does the EU price indication directive apply to general reductions?
The above guidelines refer to specific product price reductions, general price reduction statements carry slightly different obligations. In a general statement such as “20% off everything” the prior price does not have to be included in the announcement itself. However, you must show the prior price for the individual goods on price tags in shops or online. This can be applied to categories too for example “20% all coats”.
Prior prices and sales campaigns
If you apply successive reductions one after the other as part of a sales campaign, you must use the lowest price in the 30 days before the first reduction as the prior price.
- You must gradually reduce the price without interruption.
- It must be part of the same sales campaign.
- The prior price is the same for all price reduction announcements during the campaign.
Example of the new price indication directive in action
The following example taken from Zalando clearly displays the original price of the product.
You’ll find more examples and information on the legislation in the CCPC’s guidelines on the price indication directive.
What happens if a business does not comply with the new price indication directive?
The CCPC strongly encourages businesses to keep records of information relating to price promotions. Businesses who do not comply with the new legislation may be subject to criminal prosecution or a fixed payment notice. Failure to comply can result in a Class A fine.
Where can I find more information about the new directive?
A full outline of the updated legislation has been added to the CCPC website here.
You can also read this statement by the CCPC on the new directive.
Ensuring compliance on your online store and marketing campaigns
We recommend that our clients review their planned promotional campaigns to ensure compliance with the new EU price indication directive. Please reach out to your point of contact at StudioForty9 if changes are required.
Online stores will need to incorporate this prior pricing information to their products if they don’t already have this capability. Please reach out to your point of contact if updates are required.
To learn more about partnering with StudioForty9 for your ecommerce and performance marketing needs, please contact info@studioforty9.com.
