With Brussels discussions on the long proposed EU Sales Promotion Regulation postponed from 25 November 2004, is this the end of the line?
Topic: Promotion marketing
Who: The Competitiveness Council of the European Commission
Where: Brussels
When: November 2004
What happened:
More delays have assailed progress of the now long-proposed EU Sales Promotion Regulation.
The much-vaunted instrument hailed by the industry in 2002 as a refreshingly bold initiative to harmonise rules for those running prize promotions across Europe, was due to be discussed by the EU Competitiveness Council on 25 November 2004.
Prior to this, yet another amended draft to the Regulation had been published, and this had caused even more concern as to whether there was anything left in the now much amended law that was worth proceeding with.
Carve-outs growing
Yes, there were still the standardised rules for prize draw promotion terms and conditions, but there were ever-growing numbers of carve-outs and exceptions.
For instance, entirely outside this Regulation would be promotional contests and games in which participation was exclusively subject to a prior obligation to purchase a promoted good or service.
Also excluded would be promotional contests and games offering a cash prize or a total package that exceeds €100,000 per promoted good or service per year in value. Excluded too would be promotional contests and games in the editorial content of the media, for instance television programmes such as "Who Wants to be a Millionaire?" and magazine and newspaper contests, although this latter exception is unclear in its ambit. Also excluded would be sales below cost and sales promotions of tobacco and alcohol.
Only 25% of UK promotion marketing covered
Such are these carve outs, that the UK's Institute of Sales Promotion recently claimed that only 25% of UK promotion marketing activity would be caught by the Regulation if it came into force in its current form.
Toymakers' concern
Toy manufacturers also expressed concern that whereas the Regulation had started out simply indicating that offering prizes to under 14's that might harm them physically was prohibited, we had now got to a situation in which:
"… the promoter is prohibited from providing directly to a child who is under 16 years of age a free gift, a premium or a prize awarded in a promotional contest or a promotional game if it is of a nature that might seriously impair its physical, mental or moral development".
Another provision causing concern, particularly with the UK's Direct Marketing Association, was a prohibition on promoters charging any "associated costs" for participation in a promotional contest or game other than "non-premium rates of postage or telecommunication". In other words, unless the prize event was outside the regulation altogether, premium rate entry events would be banned.
Major country objectives
There were others who were unhappy with the latest draft of the Regulation, most notably France, Germany and Italy.
Germany and Italy were unhappy with a "country of origin" clause, which would appear something of a nonsense since the absence of such a clause would mean potentially that we were all back to square one, with each EU member state allowed to apply its own rules. France on the other hand was concerned about inadequate disclosure requirements as to the terms of promotions, whilst Germany was concerned that there were too many disclosure requirements!
Blocking vote threat
On top of this, new voting arrangements coming into force with the enlargement of the European Union meant that if it came to a vote, Germany, France and Italy would be able to block any further progress on introducing the Regulation.
It may have been because of this that plans to further debate the Regulation on 25 November within the Competitiveness Council were shelved only a matter of two weeks before the meeting was due to take place and at the time of writing there has been no indication as to when the discussions might be reconvened.
Why this matters:
Since its first tabling in October 2001, this Regulation has always seemed to be regarded as a poor relation compared with the proposed "Unfair Commercial Practices Directive" which has a broader and more worrying potential impact on European promotion marketing. This Directive appears to be moving ever closer to adoption, whilst all current indications are that the sales promotion regulation is well-nigh dead in the water.
