CJEU rules on pricing display strategies of Aldi Süd

The question

How do you correctly advertise pricing discounts given the “prior price” rule in the Pricing Information Directive (in particular where the retailer has sold the product at a lower price within the 30 days preceding the price reduction)?

The key takeaway

Businesses selling goods in the EU should review their pricing display strategies following the CJEU ruling which confirms that labels claiming a percentage price reduction must do so relative to the lowest price in the last 30 days.

The background

Aldi Süd, the German retailer, had sold fruit within the previous 30 days at three different prices: the lowest price (which was no longer offered), the current ‘sale’ price (the middle price), and a higher price. The labelling then calculated an advertised discount rate as a percentage difference between the middle price and the higher price, as well as also displaying the lowest price the product had been on sale for in the last 30 days in small print at the bottom of the display.

The development

The Court of Justice ruled that the Aldi strategy was inconsistent with the goal of the Pricing Information Directive (as updated by the Omnibus Directive) to ‘improve consumer information’. Indications of price reductions in the EU need to be calculated based on the “prior price”, which is generally the lowest price at which the retailer had sold that product within the 30 days preceding the price reduction.

Why is this important?

Whilst this decision does not change the law as stated by the updated Pricing Indication Directive, it is important in clarifying and confirming its strict application. Whilst there are many ways that businesses may wish to present pricing advantages, including was/now pricing, percentage-based discounts and presentations that adopt both, the landscape has become trickier to navigate. This case makes it clear that even if the lowest price in the prior 30 days has been set out somewhere on the pricing label, this does not mean that the percentage discount could then be calculated by reference to a different price (ie the usual selling price). Clearly this has the potential to leave businesses in an unsavoury position where a discounted current price is better than the usual selling price but not as good as a sale price that has been available in the prior 30 days.

Any practical tips?

Businesses selling to consumers in the EU will want to be extra vigilant when making any kind of price reduction announcements in relation to products that have been on promotion within the prior 30 days. This is of particular concern at this time of year, when Black Friday promotions are often closely followed by Christmas holiday promotions.

Winter 2024