At present, different Member States have different rules on retailing. Five Member States currently regulate sales below cost, namely Belgium, France, Greece, Luxembourg and Denmark.
The UK has some of Europe’s most relaxed retailing laws. The growth of e-commerce has led to the plan to harmonise retailing laws at the European level.
The Commission’s draft Regulation regulates sales promotions, defined to include discounts, free gifts, premiums or the opportunities to participate in promotional contests or games (but not including gambling services) and prohibits any ban on sales below cost.
Sales below cost are defined as the sale of a product or service below the retailer’s net invoice price, including carriage, insurance and delivery costs and tax.
The European Parliament’s Committee on Legal Affairs and the Internal Market met on Tuesday. It considers that sales below cost are anti-competitive and favour large companies at the expense of consumers and SMEs.
The Committee basically deleted from the Commission’s draft all the provisions that would have allowed sales below cost throughout all Member States. It also limited the scope of the Regulation to temporary sales promotions only.
The draft Regulation will be debated by the full Parliament in September.
See: Relevant documents.