May 26, 2023
May 26, 2023
In essence, the decree on mandatory sales allowed stores to sell certain products below the purchase price.
The best advertising and marketing tool for traders is price communication. According to current regulations is considered unfair distributor behavior is when someone sells a product below the purchase price. However, this will change with the decree entering into force on June 1, reports Világgazdaság.
Mandatory promotions must be announced for certain store chains from June 1, and on the same day, the price monitoring system launched by the government starts, which shows how much a certain product can be purchased in which store.
Lidl issued a statement yesterday saying it was required Instead of a 10 percent price reduction, it gives a bigger discount of 20-50 percent in the case of mandatory actions. Prior to this, Penny announced that it was offering twenty products with a discount of up to 30 percent instead of the prescribed 10 percent.
The store chains thus give such a significant discount that they can practically only sell the affected products below the purchase price.
In Lidl, marked fresh meat and meat products can be purchased with a 25-30 percent discount, certain milk and dairy products, as well as bakery goods between 25-40 percent, and marked fruits with a 25-30 percent discount.
The new regulation provides a loophole
Although selling below the purchase price would be considered fundamentally unfair distributor behavior, the mandatory campaign regulation provides an exemption from this. In order for traders to be able to comply with the rules for holding promotions, a sales below the transfer price invoiced by the supplier do not constitute unfair distributor behavior.
Therefore, traders cannot expect to be condemned even if they sell products that are affected by the mandatory discount below the purchase price.
Otherwise, the regulation classifies the modification, termination or re-contracting of a supplier contract as unfair distributor behavior, so the loss resulting from promotions must be borne by the trader in any case.
Under pressure from Lidl and Penny it is possible that other chains will start selling their products much cheaperas the goal now is to lure customers back to the store after the retail turnover has significantly decreased.