Verbatim report of proceedings

Monday, 10 January 2005 - Strasbourg

14. Sales promotions in the internal market

  President. The next item is the oral question to the Commission on sales promotions in the internal market, put by the Group of the Alliance of Liberals and Democrats for Europe and the Group of the European People’s Party (Christian Democrats) and European Democrats.

  Newton Dunn (ALDE), Author. – Madam President, I am very grateful to the Commissioner for being here to help us with this question. Originally, it was to be put to the Council and the Commission together, because the proposal, which has passed its first reading in Parliament, has been blocked in the Council for far too long. The purpose of the question and debate was to get the Council to explain why it is blocked and what it is doing to move it forwards and get it back to Parliament to benefit the public. Unfortunately, the Conference of Presidents, in its wisdom, has readjusted this proposal for this debate and we are now putting the question to the Commission only. The Council is not here at all, but I suppose that half a debate is better than none!

This is a proposal on sales promotions. In each of the 25 Member States there are different national laws about what is permitted – loss leaders, three for two, giving away free samples. There is no single internal market in the rights of retailers who cross frontiers to operate with the same offers and commercial tools right across the Union. The original Commission proposal – a thoroughly good one – was to have a single market in sales promotion techniques.

This goes back originally to the 1992 Single Market proposal. As far as I know, this was first proposed in a Green Paper in 1996 – eight years ago. It passed its first reading in 2002 – two-and-a-half years ago – but, since then, we have been waiting for the Council to move.

There are obvious benefits if we can get this through. More competition and choice for the public, lower prices and more transparency. For retailers, there would be more flexibility across the whole single market, and another tool for marketing and doing business, creating wealth and generating jobs.

But so long as we do not have cross-border facilities here, costs are higher because retailers have to market different plans for each of the 25 Member States. The recent report on the Lisbon Strategy highlighted the internal market as one of the priorities, and this is part of the internal market.

There are concerns about the treatment of children and small businesses, and that would be part of the proposal that we are anxious to deal with.

The questions I must put to the Commissioner are twofold – the Council meets in secret and Parliament cannot be there, but at least the Commissioner gets to sit in the Council, so he can tell us what is going on. Firstly, how can we move this through the Council and get it moving again for the benefit of the citizens? Secondly, since the proposal was drawn up some years ago, the euro has flourished and e-commerce – trading via the Internet – has developed enormously, the committee would like to know whether the proposal as originally put forward by the Commission is still valid today or has been overtaken by events? Also, do the proposed directive on services and the proposed directive on unfair commercial practices interfere with the original proposal on sales promotions? We would like a new view on where the Sales Promotion Directive now stands. Does it need revision or do we just need to push the Council into action as fast as possible?

  Harbour (PPE-DE), Author. – Madam President, I would like to thank my colleague, Mr Newton Dunn, who has taken over what we hope will be the rapporteurship for the second reading, for encouraging us to work together to move this question. It was a shame we could not get the whole committee's support, but it is nevertheless important that we give you, Commissioner, the opportunity to hear where we stand on this.

I would like to reflect on one or two points, to build on what Mr Newton Dunn said about the economic importance of this issue. Those of us who want to push for the completion of the internal market as the cornerstone of the Lisbon Strategy, as set out in the Kok Report and in so many reports from the Council, would like you to tell us from the inside why it is that Member State governments, whose prime ministers attend these great Council meetings and make statements about the importance of completing the internal market – and particularly the internal market for services – are extraordinarily reluctant, when invited to give consumers the opportunity to access sales promotions, discount offers and other product promotions offered in another country of the European Union, to make these available to their own consumers?

I pay tribute to Mr Brinkhorst, the Dutch Minister for Economic Affairs, because I know he took the Sales Promotion Regulation very seriously and was equally baffled about the lack of progress. I recall that he told our committee that we had surely reached the stage in the development of the internal market where Member States have to start trusting each other. What could be more fundamental when asking for trust than saying that consumer protection legislation which allows sales promotions in one country, is equally applicable to another?

How can the attitudes of consumers in one country to promotions which they are allowed to access, whether it is a discount promotion or a promotional game, or an annual sale at a certain time, differ from those in another? We have an extraordinary situation in which, within markets that are very close together, there are different conditions in stores because of different sales promotion regulations.

The bafflement that has led to this question arises from wondering how Member States can say they are serious about creating an internal market and serious about having a single regulation on unfair commercial practices, when they are unwilling to allow consumers to access these rights and trust each other. That is the fundamental question.

Commissioner, I imagine you are as baffled about it as we are. Together we may be able to solve some of the problems.

  McCreevy, Commission. The proposal for a regulation on sales promotions that was strongly supported by this House two years ago is a key internal market initiative linked to the achievement of a smooth-running internal market for services. I am therefore pleased to see that Parliament has maintained its interest in this text in spite of the fact that the Council is still considering it.

Sales promotions are key tools to market goods and services. They cover discounts of all forms: premium offers, free gifts, promotional contests and promotional games. They are a tool for entering into new markets with innovative products or services, for encouraging customer loyalty, for stimulating competitive actions, or for efficiently managing stocks, to name just a few areas in which sales promotions are crucial. Their design, execution and communication accounts for a large number of jobs in the EU, with investments representing billions of euro.

Sales promotions are essential to the development of cross-border trade in products and services within the internal market. This is particularly true for small- and medium-sized enterprises in their development of new markets. Yet the free movement of goods and services is seriously hindered due to a myriad of different national rules governing sales promotions.

I wish to assure you that the Commission has made its best efforts to assist the successive presidencies-in-office of the Council to achieve a political agreement. In particular, the Commission has shown great flexibility in terms of the two key remaining issues, which are the choice of the legal instrument and the inclusion of a mutual recognition clause in the text.

As regards the implications of the Lisbon Strategy, it is clear that if the current position were not to alter, then this impasse would suggest that the Council would be unable to achieve the internal market commitments it has set itself in that context. However, the Commission does not believe that the negotiations on this text are over.

The alternative to harmonisation will be Court rulings that would lift the identified disproportionate restrictions, but this will not harmonise provisions that achieve a high level of consumer protection, including the protection of minors. The Commission trusts that the Council will not find this a satisfactory proposition. The Commission will therefore continue work with the incoming presidency with a view to finding a solution that brings about a genuine single market for sales promotions.

  Patrie (PSE), on behalf of the group. – (FR) Madam President, Commissioner, ladies and gentlemen, as you know, the proposal for a regulation on sales promotions has, since the start of the debate process, been through many misadventures, since it has been rejected no less than four times by the Council in three years.

This is hardly a surprise, however. How can these persistent blockings be a cause for surprise when no one any longer clearly understands what options are embraced by the Commission when it comes to European consumer rights, in spite of the adoption, almost two years ago in March 2003, of the Green Paper on Consumer Protection.

Does the ambition still exist to have, in time, a harmonised consumer law, as promoted, it seems, by the Directive on Unfair Commercial Practices, or has harmonisation of any kind simply been given up on, as appears to be indicated by the draft Directive on Services in the Internal Market?

To this vagueness about strategy is added, if I may say so, a certain confusion about concepts and, in particular, about key concepts such as the internal market clause, mutual recognition or the celebrated country of origin principle, to which the draft documents alternately make reference, without its being particularly clear why, and in which cases, one principle has been chosen over another and what the advantages of that choice will be for both companies and consumers.

It is therefore perfectly understandable why States with particularly protective legislation for consumers hesitate to give up what they have already in favour of some uncertain alternative and to subscribe without reservations to a system that, whatever the terms in which it is labelled – mutual recognition or country of origin principle – cannot fail to end up in legal dumping, that is to say a situation in which the least specific national legislations progressively become the models for other legislations.

As long as no clear answers are given to these prior questions and as long as no work has been done to make these various current documents consistent, I do not therefore, for my part, see the urgency of obtaining a political agreement on this proposal for a regulation. To put it crudely, it is urgent that we wait.

Finally, there is also disagreement about the legal instrument, as you have just emphasised, Commissioner. This is not a simple point of procedure, since the choice of the regulation, rather than the directive, remains, for me, questionable in an area in which, in view of extremely strong cultural sensibilities such as have been seen on the issue of reduced-price sales, margins of flexibility should be given to the Member States.

Finally, let us be serious. Let us stop invoking at every opportunity the need to re-launch the Lisbon Strategy and stop pretending to believe that the creation of millions of jobs in Europe is dependent upon the regulations governing games, promotional contests and other discount promotions. The Lisbon Strategy is worth more than that. Let the three pillars of competitiveness and, in addition, social development and environmental protection be acknowledged as being of equal value.