Omnibus Decree

New provisions on discounts and promotions to protect consumers.

As of July 1st, 2023, Legislative Decree no. 26 of 2023, also known as the "Omnibus Decree," concerning price reduction announcements, came into force. These provisions implement the principles expressed in the directives of the European Union and aim to improve consumer protection. With the Omnibus Decree, the so-called "Consumer Code," Legislative Decree no. 206/2005, has been amended.

One of the main novelties introduced concerns the obligation for every price reduction announcement to indicate not only the discounted price but also the original price to which the discount was applied, which cannot be any price applied before but must necessarily be the lowest price applied in the 30 days preceding the discount.

Consequently, in accordance with the new regulations, when announcing a price reduction, Etilika displays the lowest price practiced in the previous 30 days, striking it out and specifying the percentage of discount calculated on that price, and the discounted selling price.

Furthermore, Etilika indicates the price recommended by the manufacturer, its suppliers, etc. next to the selling price. The distinction between the lowest previous price and the recommended price is also made clear by the information provided on each product sheet, making price-related information transparent to our customers for their purchases.

The regulations provide for some exceptions in which it is not necessary to indicate the lowest previous price, such as in the case of launching new products or in the case of promotions that involve discounts applied when purchasing multiple products of the same type or combinations of products indicated in the offer.

For further information on the regulations, it is possible to consult the Official Gazette website, the FAQs issued by the Ministry of Enterprises and Made in Italy, or the information provided below.

To which price reduction announcements does the new regulation apply?

The new regulation applies to all announcements that, regardless of the distribution channel used, create the impression of a reduction in the selling price of a good compared to the previous price set by the seller.

Any communication that highlights the economic advantage and the savings obtained from the purchase of a certain good within a specific period is considered relevant for the application of this regulation.

The new discipline also applies to price reduction announcements formulated in a generic manner, such as "today 20% discount on all items" or "this week 20% discount on all items in this category."

What promotional activities are not subject to the regulation?

Given that below-cost sales (regulated by Legislative Decree April 6, 2001, no. 218) are excluded pursuant to Article 17-bis, paragraph 6 of the Consumer Code, other cases may be excluded from the scope of application of the regulation on price reduction. By way of example, these types of announcements are excluded:

comparative advertising with prices practiced by competitors, which must still be carried out according to the specific rules governing it (in addition to Legislative Decree September 6, 2005, no. 206, containing the Consumer Code, Legislative Decree August 2, 2007, no. 145, implementing Article 14 of Directive 2005/29/EC amending Directive 84/450/EEC on misleading advertising);

price reductions subject to specific conditions other than the mere purchase of the product, such as premium operations, loyalty programs, promotions consisting of awarding vouchers for subsequent purchases to consumers who have already made purchases of specific products and/or with a minimum amount, price reductions starting from minimum ceilings and/or within maximum spending limits (e.g., 25% discount on a line of products up to 100 euros in expenditure), price reductions on a basket (e.g., one or more labels) conditioned on the purchase of a minimum number of products or within a maximum number of products or discounts on the purchase of a product to the consumer who simultaneously purchases another product (e.g., if you buy two products, 50% discount on the cheapest one);

promotions subject to conditions (e.g., 3 for 2) and other quantitative discounts or gifts on particular purchases (e.g., gifts linked to a certain value of purchases made);

personalized offers, meaning reductions reserved for a specific consumer under particular circumstances, such as at the time of enrollment in the loyalty program or on special occasions (e.g., marriage or birthday), or upon the occurrence of other conditions (e.g., belonging to a predetermined age group etc.);

price reductions with an undetermined object, for example, 20% discount on the most expensive product in the cart or vouchers usable up to a maximum number within a basket;

discount coupons, vouchers conditioned on particular requirements, or intended for a specific category of consumers;

advantages to the consumer in the case of combined sales (e.g., offers of two or more products at a special price lower than the sum of the prices of individual products);

launch prices of products not sold by the professional in the previous 30 days;

generic announcements on the convenience deriving from the application of continuous prices such as, by way of purely illustrative and not exhaustive example, "always low prices", "low and fixed", or "here the best convenience".

How is the "previous price" that must be indicated under the new regulation identified?

The "previous price" to be considered as a reference for the price reduction announcement is the lowest price applied to the general public in the previous 30 days.

How do the new rules on indicating the "previous price" apply for the identification of the normal selling price to be displayed on the occasion of extraordinary sales referred to in Article 15, paragraph 5, of Legislative Decree March 31, 1998, no. 114?

In price reduction announcements made on the occasion of extraordinary sales referred to in the aforementioned Article 15, paragraph 5, the "previous price," understood as the lowest price applied to the general public in the previous 30 days, must be represented as the reference price on which to calculate the percentage reduction of the discount or reduction. For example, if the price reduction announcement presents a "50% discount" and the lowest price of the last 30 days was 100 euros, the seller must indicate "100 euros" as the "previous price" crossed out on which to base the 50% reduction, even if the last selling price of the good was higher.

Who is subject to the application of the new rules on price reduction announcements?

The new art. 17-bis applies to the seller, i.e., the professional who is the actual party to the contractual relationship with the consumer. In other words, the seller.

Must a price practiced for a period of less than thirty days also be considered as a "previous price"?

Any public offer of a certain good at a specific promotional price is considered valid for the determination of the "previous price".

How should the "previous price" be identified in the case of progressive reductions?

In the case of progressive reductions within the same promotional campaign, where the percentage of discount increases progressively without temporal interruptions, the "previous price" to be indicated will be the original starting price of the campaign. For example, if the lowest price of the product in the previous 30 days before the start of the promotional campaign was 100 euros, the seller will indicate 100 euros as the "previous price" when announcing the first price reduction, for example, a 10% discount. Subsequently, this same "previous price" of 100 euros will be maintained even when subsequent reductions of 20%, 30%, and so on are announced.

Should the price reduction applied only to a very few references for circumstances that determine their economic depreciation without compromising their suitability for sale (e.g., products with damaged packaging or products nearing expiration) be considered for the determination of the "previous price" if followed, in the subsequent 30 days, by a promotional sale on the same product?

The legislation, with the aim of ensuring consumers a realistic perception of the economic convenience of promotions, does not apply to offers involving only a few items due to the depreciation of the value of the specific asset. In such situations, the use of the "previous price" as a reference could be distorted if a price applied to a damaged or nearing expiration product is considered. Compared to this category of goods, due to its peculiar characteristics, the normal process of determining the price is not followed because it cannot be equated in qualitative terms to an undamaged product or one with a complete useful life.

What perishable goods are excluded from the application of the regulation?

The regulation excludes from application perishable goods, which include:

agricultural and food products that, by their nature or during processing, could become unsuitable for sale within 30 days from harvest, production, or processing;

meat products that have specific physico-chemical characteristics, such as water activity (aw) greater than 0.95 and pH greater than 5.2, or water activity greater than 0.91, or pH equal to or greater than 4.5;

pre-packaged products with an expiry date or minimum conservation period not exceeding sixty days;

bulk products, even if refrigerated or protected by wrapping, not treated to extend their durability for more than sixty days;

all types of milk.

These goods are defined by the regulation in Articles 2, paragraph 1, letter m) and 4, paragraph 5-bis, of Legislative Decree November 8, 2021, no. 198.

What price should be referred to when a good has been marketed more than 30 days ago?

Exactly, when it comes to seasonal or stock depletion products, price reduction announcements must comply with the general regime, indicating the "previous price" as defined by Article 17-bis of the Consumer Code.

In cases where there are no "previous prices" as defined by Article 17-bis of the Consumer Code, price reduction indications must still comply with the provisions on unfair commercial practices.

In the case of a good being ordered through the online channel and paid for at the point of sale, is the "previous price" to be referred to the one from the online channel?

Exactly, the determining moment to consider is that of the public offer for sale and the order. It is at that stage that the seller and the buyer enter into a contract in which the seller undertakes to sell that particular good at a defined and unchangeable price upon collection. Payment made at the point of sale, instead, falls within the execution phase of the contract.

Can the seller announcing a price reduction also report other reference prices in addition to the previous price as regulated by Article 17-bis?

According to the Communication from the European Commission of December 29, 2021, the seller announcing a price reduction is not prohibited from reporting other reference prices, provided that they are indicated clearly and without generating confusion or diverting the consumer's attention from the indication of the "previous price" under the new regulation. The same Communication specifies that the presentation and calculation methods of any other reference prices are subject to the directive on unfair commercial practices.