On average, 7 out of 10 traders do not comply with the rules on price indication during sales and promotions. A precise application of the rules is particularly important given the Swedish Consumer Agency’s focus on price indication, having recently conducted a sweep of the sector and provided new guidelines. So, what are the key points for traders and how does it impact future sales- and promotion signage? Here are our key takeaways:
The EU has actively been working towards enhancing price transparency since the adoption of the EU Omnibus Directive . Despite the adoption of national provisions on price indications of reduced prices in Sweden, these provisions are deemed too vague by themselves. To address this, the Swedish Government instructed the Swedish Consumer Agency to provide guidance and conduct a compliance sweep of traders in Sweden.
On October 9, 2023, the agency issued an opinion on the interpretation of the new provisions. This was followed by the agency published binding guidance on price indication addressing the new provisions on the indication of the 30-day price on October 28, 2023.
The provisions require traders to inform consumers of the lowest price in the previous 30-day period for products which are indicated as being reduced in price, in the following referred to as “the 30-day price”. Price transparency in conjunction with reduced prices has clearly been a prioritised area for the Swedish Consumer Agency, as it faces the challenge of price transparency head on.
The guidance released by the agency focuses on high consumer protection and addresses four primary areas:
In conjunction with the publishing of this new guidance, the Swedish consumer Agency also conducted a sweep to investigate compliance finding that, on average, 7 of 10 companies did not comply with the new rules on price indication (read the full report in Swedish here). The festive period is filled with promotions and sales, and also occurs in close conjunction with Black Friday sales requiring companies to pay attention to the particularities of the rules on price indication.
In addition to the new provision on price transparency, new provision on sanctions in case of non-compliance were also implemented following the Omnibus Directive. As such, non-compliance with price transparency is now subject to marketing practices sanctions and may result in a fine of minimum SEK 10,000 and maximum 4% of the traders’ annual turnover.
Some exceptions do however apply, in which case the 30 day-price is not required to be provided.
The growing focus on price transparency and increased legal scrutiny also comes with increased legal, reputational and financial risks for traders. Therefore, traders need to act now and adopt routines to ensure compliance with price transparency obligations in Sweden and the EU, not least when sales and promotions come right after each other. Bird & Bird’s international Retail & Consumer group is well placed to advise on this increasing legislation, with deep expertise in the sector across international markets. From navigating price transparency obligations to marketing compliance, our experts can advise on these issues in this rapidly changing space.