Food for thought: the new Pricing Practices Guide

In the wake of a much publicised super complaint by Which? that exposed a series of common misleading pricing practices by leading supermarkets, the Trading Standards Institute has issued a new Pricing Practices Guide for consultation, which closes on 5 January 2016.

Among the problems identified by the Which? investigation were disingenuous special offers where a product would be priced at a higher amount for a very short period of time before being priced at a lower ‘now’ price for considerably longer.  Another issue was the surreptitious shrinking of pack sizes without any corresponding reduction in price.

The law on pricing practices is set out in the Consumer Protection from Unfair Trading Regulations 2008, which prohibit unfair commercial practices such as misleading prices or price advantages that materially distort the behaviour of the average consumer.

The previous Pricing Practices Guide, issued in 2010, was designed to complement this legislation and provide useful practical advice to businesses on how to comply with the law.  However following a number of high profile consumer protection cases and the super complaint, the guide has come in for criticism on the basis that it was prescriptive to an extent that detracted from the broad requirements of the legislation.  For instance, the Guide stated that if a price was used for 28 days that would be sufficient for use as a reference price as part of a special offer.  This arguably created a ‘safe harbour’ for businesses that did not reflect the underpinning legal obligation to not trade unfairly.

The new Guide is a complete overhaul of the 2010 guidance, and aims for a more holistic, principle focused approach that is more adaptable to the demands of the legislation.  Instead of thresholds such as the 28 day rule, which has been removed completely, the new Guide sets out a series of indicative examples of when a business’s overall behaviour towards consumers in relation to a promotional activity has been appropriate or otherwise.

It remains to be seen whether the guidance, when issued in its final form, will result in a considerable overhaul in the approach retailers take to sales and promotions – no doubt this will be somewhat dependant on it being coupled with active enforcement.

Businesses are nonetheless strongly urged to take note of the new Guide and the legislation in general with the Consumer Rights Act 2015 giving enforcers such as Trading Standards greater power to take action against businesses for suspect practices.

If you would like us to consider your terms of business or marketing materials to ensure compliance with all of the latest consumer legislation or if you require any advice or assistance on other commercial matters,  please do not hesitate to contact me at john.pickervance@forbessolicitors.co.uk or on 0800 321 3258.

This entry was posted in Corporate & Restructuring.

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