Come July 2004, we will have a new price marking order which lays down the law about how products available in shops and on-line should be priced. The changes from the old 1999 Price Marking Order are small, but important.
New Law: Price Marking Order 2004
Background
The Price Marking Order 1999 ("1999 Order") implemented EU Directive 98/6/EC on "Consumer protection in the indication of the prices of products offered to consumers."
It applied to all products offered by traders to consumers other than those supplied in the course of the provision of a service, those sold by auction or works of art or antiques. With specified exceptions, the 1999 Order required that the selling price be given wherever a product was offered by a trader to a consumer.
The most notable exception to this requirement was advertising, where a trader was exempt from the requirement to give a unit price. However, the definition of "advertisement" in the 1999 Order made it clear that the exemption did not extend to any advertisement by means of which a trader intends to encourage a consumer to enter into a distance contract, a catalogue, a price list, a container or a label." So for example, in a distance sales context, where on-line sales are in prospect, either on a website or as a result of the sending of an e-mail, the 1999 Order definitely applied and there was an obligation to give the unit price.
What will change?
The 1999 Order will be entirely superseded by the Price Marking Order 2004. The introduction of the new order has been propelled largely by the requirements of the Electronic Commerce (EC Directive) Regulations 2002. Yet the changes relating to this directive net out to just one new sub-sub-paragraph in Article 7(1)(b)(ii).
This provides that subject to paragraph 2 (more of this in a moment) an indication of the selling price or unit price given in accordance with the Order, must be "unambiguous, easily identifiable and clearly legible, so placed as to be available to consumers without the need for them to seek assistance from the trader or someone on his behalf in order to ascertain it and must, unless it is an item of jewellery, precious metal or a watch displayed in the window of premises where it may be for sale and the selling price is more than £3,000, be given in proximity to either the product or "[and here is the new bit] in the case of distance contracts and advertisements, a visual or written description of the product."
"Distance advertisements"
Here, we are quite clear as to what the "distance contracts" reference means, so that for instance unit prices must be given in proximity to any product being sold on a website. Where we have slightly more difficulty is the use of "advertisements" in the phrase "distance contracts and advertisements." Do we have a new term of art here, "distance advertisement?" As this phrase is not defined in the Order, we will have to assume that it effectively means "any advertisement by means of which a trader intends to encourage a consumer to enter into a distance contract", but it would have been nicer for this to be clarified in the Order itself.
Another amendment deals with "general reductions". Article 9 provides that where a trader proposes to sell products to which this Order applies, but at less than the selling price or the unit price previously applicable, he may comply with the obligations of the Order to indicate the selling price and/or the unit price by indicating by a general notice or any other visible means that the products are or may be for sale at a reduction, provided that the details of the reduction are prominently displayed, unambiguous, easily identifiable and clearly legible.
We are not clear what in particular may have driven this new law, but effectively it means that instead of having the reduced unit price adjacent to every item on sale in the shop, one general sign will suffice showing, for instance, that all prices have been cut by 10%, so long as it complies with the prominence, legibility and other requirements set out above.
What happens next:
The Price Marking Order 2004 comes into force on 22 July 2004.
