Implementation of New Promotional Instruments (PINs)
As a distributor or supplier, you want to accelerate your sales by offering your consumer customers promotional benefits that they can enjoy when they checkout.
Your goal is to:
- Implement a flexible and loyal promotional operation,
- Which for you, the distributor, has the advantage of not incurring any costs,
- And for you, the supplier, allows you to remain in control of the promotional mechanics.
The necessary formalization of PINs
New promotional instruments (PINs) are sales promotion techniques, which have in common to substitute for physical media, such as batches of products purchased together, intangible media, at the origin of virtual batches.
For example, loyalty cards or virtual discount vouchers, prize pools, federative offers, couponing, cross-couponing, etc., can be found in PINs.
The main feature of PINs is that price reductions granted to consumers by distributors are funded by suppliers.
PINs can be described as services rendered to the supplier and fall under either the single agreement or agency contracts.
PINs must be the subject of a precise wording that must reflect the negotiations between the distributor while adapting to operational constraints.
The pin must specify the mechanics of the promotional operation, the period over which it must be implemented by the distributor, the products concerned.
The drafting of the pin must specify the obligations of the distributor, in particular in terms of promotional mechanics, and the modalities according to which it must report its actions to the supplier, and justify the sums actually advanced to the consumer.
Also comply with rules on vertical agreements, mandate, and agricultural products
However, this formalisation must not result in the supplier fixing the price, which could be heavily penalised under the provisions on vertical agreements.
In addition, since the Hamon law of 17 March 2014, PINs are obligatorily subject to the mandate regime. PINs can therefore no longer be included in the financial benefits that reduce the net unit price in the calculation of the resale at a loss threshold. Article L. 441-4 thus provides for the conditions under which the supplier undertakes to grant consumers, during the year, promotional benefits on its products or services must be fixed within the framework of mandates concluded and executed in accordance with the rules of the Civil Code, each of these mandates must specify in particular the amount and nature of the promotional benefits granted, the period of granting and the modalities of implementation of the benefits as well as the modalities of reporting by the distributor.
For agricultural products mentioned in Article L. 443-2 of the Commercial Code (fruits and vegetables, except ware potatoes, intended to be sold fresh to the consumer, fresh, frozen or deep-frozen meat of poultry and rabbits, eggs and honeys) as well as milk and milk products, these benefits may not exceed 30% of the value of the unit price list, including management fees.
Gouache Avocats supports you in this technical writing, according to a methodology that will allow you to:
- To choose the best contractual option,
- To detail the conditions of the operation
- To set obligations of the distributor
Guillaume Gouachon
Avocat associé
Responsable "Consommation, produits et conformité"
Martine Behar Touchais
Professeur de droit Of counsel
Responsable "Distribution & Concurrence"
