The calculation of a price reduction listing must be based on the previous price

In a judgment of 26 September 2024, the CJEU states that theannouncement of a price reductionmust be calculated on the actual basis of the previous price in accordance with Article 6a of Directive 98/6.

In the context of this case, the Court of Justice of the European Union (CJEU) was seized by the Court of Düsseldorf in Germany concerning Aldi’s advertising practices.

A consumer association brought an action against Aldi for announced price reductions on food products using a percentage, whereas the advertised discount was not calculated on the lowest price in Aldi stores in the 30 days prior to the listing, but only mentioned it. The association also denounces the fact that ALDI presents a price reduction of a foodstuff as a “shock price”, indicating a price higher than that which was in force in the stores over the last 30 days.

As a reminder, under Article 6a (1) of Directive 98/6, “any announcement of a price reduction shall indicate the previous price applied by the trader for a fixed period before the application of the price reduction“. The concept of “previous price” is defined by paragraph 2 of this article as “the lowest price applied by the trader during a period that is not less than thirty days before the application of the price reduction“.

By two questions for a preliminary ruling, the Court of Düsseldorf asked the CJEU whether, in the context of a a price reduction;, in the form of either a percentage or a rewarding advertising claim such as “shock price”, the previous price mentioned on the advertisement must serve as the basis for the actual calculation of the advertised discount within the meaning of Article 6a of Directive 98/6/EC.

The CJEU answers in the affirmative and naturally considered that another interpretation would run counter to the objectives of clear information for consumers.

Consequently, the reading of Article 6a of Directive 98/6/EC requires that a a price reduction;, whether expressed as a percentage or by a rewarding claim such as “shock price”, is determined by actual reference to the “previous price”, defined as the lowest price in the last thirty days.

The challenge of this judgment lies in the fact that the CJEU takes the position of excluding the application of the provisions of Directive 2005/29 relating to unfair commercial practices companies vis-à-vis consumers (paragraph 28), in accordance with Article 3 (4) of this Directive which provides that”in the event of a conflict between the provisions of this Directive and other Community rules governing specific aspects of unfair commercial practices, these other rules take precedence and apply to these specific aspects “.

So, a price reduction announcement may be considered unlawful without it being necessary to examine its misleading nature and solely because of non-compliance with Article 6a of Directive 98/6/EC or Article L112-1-1 of the Consumer Code in domestic law, whereas the French Consumer Code nevertheless includes price information in the deceptive marketing practices governed by Article L121-2 of the Consumer Code

In conclusion, this judgment may lead to question the validity of future actions, for non-compliance of the price reduction announcement with Article L112-1-1 of the Consumer Code, on the specific basis of misleading commercial practices.

Judgment references: ECJ 26 Sept. 2024, Aldi Süd, aff. C-330/23