Offers of reduced-price goods are real eye-catchers. If discounts expressed in percentages or catchy claims such as “a price highlight" are advertised, the advertiser must also state the lowest price of the 30 days before the price reduction was advertised. Is it sufficient to simply state the previous price or must this actually be the basis for calculating the reduced price? The CJEU had to examine this question.
Proceedings concerned the following Aldi reduced prices for pineapples and bananas:
The German consumer advice centre believed that this advertisement using different price indications and “down from” prices impaired the interests of consumers and was therefore unfair; an action against Aldi was therefore brought before the Regional Court of Düsseldorf. This court referred the following questions to the CJEU:
Does the advertised price reduction expressed in percent have to be based on the lowest price of the previous 30 days? Must the advertising emphasising a price reduction, such as a "price highlight", also be based on this previous price?
According to Article 6a of EU Directive 98/6/EC (as amended by EU Directive 2019/2161) regarding better enforcement and modernisation of Union consumer protection rules which also aims at protecting consumers when it comes to the indication of prices, each time a price reduction is announced, the previous price applied by the trader over a certain period of time prior to the price reduction must be indicated. The previous price is the lowest price charged by the trader within a period of at least 30 days prior to the application of the price reduction. In Austria, these requirements are set forth in Section 9a of the Price Labelling Act (Preisauszeichnungsgesetz).
Although Aldi had quoted the lowest price of the previous 30 days in its advertising, the advertised reduction was not based on that price, but on the price immediately before the bargain offer. As a result, Aldi was pretending to offer an attractive price reduction which did not actually exist. The CJEU has now clarified that the price reduction or the "price highlight" must actually be calculated on the basis of the lowest price of the previous 30 days and that it is not sufficient to merely mention that price in the advert.
This interpretation by the CJEU does not come as a surprise because simply providing information about the lowest price of the previous 30 days is not sufficient to protect consumers from misleading price reductions which do not reflect the actual situation. Companies must plan their pricing carefully if they want to advertise special price reductions.
If you have any questions, please contact the KWR-IP team.