On 20 July 2011, the new Energy Information Regulations 2011 came into force in the UK and CAP and BCAP are now having to make consequential amendments to the CAP and BCAP Codes. Judith Gordon takes a look at the Regulations and the CAP/BCAP consultation process and reports on the key changes UK advertisers need to be aware of.
Who: EU, CAP and BCAP
When: July 2011
Law stated as at: 25 July 2011
On 20 July 2011, the Energy Information Regulations 2011 (the "Regulations") came into force, implementing the Energy Labelling Directive 2010 (the "Directive") in the UK and establishing a new national framework for the labelling of energy-related products. This legislation is part of a wider target the European Union as a whole has set itself – to reduce its energy consumption by 20% by the year 2020. The aim is that consumers will start factoring in energy consumption when purchasing products and gradually inefficient items will disappear from the market, thereby increasing energy savings across the board.
Member states had until 20 June 2011 to implement the Directive, with such national laws to apply from 20 July 2011. The UK has therefore met this deadline by creating the Regulations.
The main aim of the Directive was to consolidate the now repealed 1992 directive of the same name, which introduced the legislative framework for the labelling of certain domestic appliances with an energy efficiency rating. The Directive however has extended the scope of the existing framework in two significant ways:
1. The framework now goes beyond domestic goods and also covers items used outside the home (e.g. in an industrial context); and
2. The framework also now covers 'energy-related' items, as well as 'energy-using' products. This is a much wider remit as 'energy-related' products includes those items which themselves do not consume energy, however have an impact (whether direct or not) on energy consumption (e.g. windows, shower heads, insulation materials etc.).
The way in which labelling requirements will be introduced under the Directive has also changed. Whereas before this was done via further directives (considered to be a time-consuming process), this will now be instigated via delegated acts known as 'EU measures'. These measures will be introduced for specific items as and when deemed necessary. Under the Regulations, Schedule 1 specifies which products already have applicable EU measures (most of which are directives made under the old framework but which still apply). These products currently include washing machines, household lamps and dishwashers.
The key obligations for advertisers
There are several obligations under the Regulations which are relevant to advertisers, including the following:
1. Regulation 7
For background, Regulation 7 states the responsibilities of the 'suppliers' themselves in relation to the labelling requirements. Suppliers, when placing on the market or putting into service, products covered by an EU measure, must:
- supply a compliant label and a fiche (a standard table of information relating to the product); and
- produce technical documentation sufficient to verify the accuracy of the label and fiche.
These requirements will not generally affect advertisers as suppliers are defined as the manufacturer or an importer/authorised representative who first places the item on the market.
2. Regulation 8
Regulation 8 however states the responsibilities of 'dealers' who, under the Directive, are defined as "a retailer or other person who sells, hires, offers for hire-purchase or displays products to end-users". This clearly therefore applies to advertisers/marketers. Under this Regulation, dealers must make the fiche available in any brochures or literature which accompanies the product when sold to end-users (Regulation 8(1)). Dealers must also ensure that when displaying the product, the product label is attached in the "clearly visible position" dictated by the relevant EU measure (Regulation 8(2)).
3. Regulation 9
Regulation 9 then details the information requirements for products regulated by an EU measure as follows:
- products offered for sale or hire, or displayed to end-users (whether directly or indirectly) via any means of distance selling (including the internet) must bring to the user's attention, information relating to the energy consumption of that product by means of the product's label and fiche, in accordance with the EU measure (Regulation 9(1));
- the information obligation referred to above may also apply to persons who build in or install such products, if the EU measure requires it (Regulation 9(2));
- where a specific model of a product is advertised, any price or energy related information given must include a reference to the product's energy efficiency class as set out in the EU measure (Regulation 9(3)); and
- technical promotional material provided to end-users describing the specific technical parameters of the product (including manuals or brochures), whether printed or online, must provide users with information regarding the energy consumption of the product and include a reference to its energy efficiency class (Regulation 9(4)).
For example in compliance with Regulation 9(1), an online retailer selling washing machines (an item covered by an EU measure) must make sure that information on the machine's energy efficiency (i.e. the information on its label and fiche) is brought to the attention of the consumer before the consumer purchases it.
In relation to Regulation 9(3), an example here would be a magazine advert for an electronics retailer showing a specific model of a television (an item due to be covered by an EU measure by the end of the year). Should the advert state the price of the model, the energy efficiency class dictated in its EU measure should also be stated.
4. Regulation 10
It is also worth mentioning Regulation 10 which confirms that labels, marks, symbols or inscriptions which do not comply with the Directive, Regulations or relevant EU measure, must not be displayed if they are likely to "mislead or confuse end-users with respect to the consumption of energy…".
Enforcement of the Regulations
Breach of any of the above-mentioned Regulations constitutes an offence punishable on conviction by a fine of up to £5,000 in the magistrates' court, or an unlimited fine in the Crown Court. The consequences of non-compliance are therefore potentially very significant. Whether the breadth of this fining range will actually be used in practice however remains to be seen.
Current CAP/BCAP consultation
The Committee of Advertising Practice ("CAP") and Broadcast Committee of Advertising Practice ("BCAP") have launched a consultation on two proposed amendments to each of the CAP and BCAP Codes in the light of the Regulations provisions affecting advertisers. The proposed amendments (which reflect the relevant obligations for advertisers under Regulation 9), relate to the sections on 'Distance Selling' and 'Environment', which appear in each of the codes. The proposed additions are as follows:
1. CAP Code
"9.10 Marketers must make product fiche information about products that fall under delegated regulations available to consumers before commitment."
"11.8 Marketing communications for specific energy-related products, subject to a delegated regulation, that include energy-related information or disclose price information, must include a reference to the product’s energy efficiency class i.e. in the range A+++ to G".
2. BCAP Code
"8.6 Advertisers must make product fiche information available about products that fall under delegated regulations to consumers before commitment."
"9.9 Advertisements for specific energy-related products, subject to a delegated regulation, that include energy-related information or disclose price information must include a reference to the product’s energy efficiency class i.e. in the range A+++ to G."
CAP has invited comments on these proposed additions and with a deadline for contributions being the end of August, swift implementation of an amended code is expected not long after.
Why this matters:
The EU has a long established commitment to environmental issues, with the pledge to cut energy consumption over the next 10 years being a key part of their green strategy. By complying with the timeline for implementing the Regulations, the UK has firmly placed its support behind the Directive and, with the possibility of unlimited fines for breach of the Regulations, has further demonstrated a potentially hard line approach for non-compliance.
The proposed amendments to the CAP and BCAP codes should also be taken into consideration by marketers and advertisers, who should be wary of enforcement by the Advertising Standards Authority and the reputational risks that go with a negative adjudication should they breach the new additions to the distance selling and environmental sections of the codes.
Advertisers should however remember that the regulatory obligations only apply to items covered by an EU measure. At present, this includes a limited selection of items, such as tumble driers, air conditioners and several household items (i.e. dishwashers, refrigerators, lamps etc.). The obligations will therefore not impact on everyone at the moment. Marketers should nonetheless be aware of the legislation as future EU measures covering new items may bring advertisers' products within the remit of the framework. Those wishing to respond to the CAP/BCAP consultation on the proposed additions to the codes should note the deadline of 5pm on 22 August 2011.