New price information regulation is intended to better protect consumers

The European “Omnibus” Directive makes changes to four existing directives, including the Pricing Directive ( HERE) .

In Germany, the amended Price Information Ordinance ( PAngV ) came into force on May 28, 2022 in accordance with the requirements of the “Omnibus” Directive. The amendment brings with it various changes aimed at improving consumer protection:

Indication of the basic price

The obligation to state the basic price is now regulated in the new Section 4 PAnGV. In the future, the basic price will be

“unmistakable, clearly recognizable and easy to read”

must be stated, but no longer necessarily has to be stated in the immediate vicinity of the total price.

Units of measure for specifying the basic price

Due to a decision by the Federal Council, Section 5 Paragraph 1 PAngV stipulates that, for the purpose of better price transparency, “1 kilogram or 1 liter” must be used as a unit of quantity for specifying basic prices. The previous possibility of a deviation for goods whose nominal weight or nominal volume usually does not exceed 250 grams or 250 milliliters will be deleted without replacement.

Declaration of deposit amounts

In the past, there have always been problems with the question of how, for example, the price of drinks subject to a deposit must be shown in disposable and reusable packaging. Section 7 PAngV now contains a clear regulation under the heading “Refundable security”. The amount of the deposit must then be stated alongside the total price and not included in it.

For example, how should the price of drinks subject to a deposit be shown in disposable and reusable packaging? This question has repeatedly concerned the courts in the past. Section 7 PAngV new version now contains a clear regulation under the heading “Refundable security”. The amount of the deposit must then be stated alongside the total price and not included in it.

New regulations for price reductions

This is probably one of the most obvious and important changes for consumers. The aim of the directive is to enable consumers to better classify price reductions for goods in the future. On the one hand, the legislature wants to prevent price reductions, i.e. rebates, from referring to previous prices without these having been requested beforehand.

This is the case, for example, when reference is made to the manufacturer's recommended retail price, the RRP. Very often, products are not even sold at the RRP when they are launched on the market; instead, retailers use their freedom in pricing to position themselves in the market based on price. The RRP then becomes a size that is rarely used anymore.

Discounts based on the RRP then have an amount that does not correspond to the real price savings based on the actual market prices. This creates a distorted view of price perception. On the other hand, fictitious discounts should also be prevented. It happens again and again that prices are raised shortly before Christmas, for example, only to be reduced again shortly afterwards, but now a discount is advertised.

Discount from lowest price

In the future, every time a price reduction is announced, the previous price that the retailer applied over a certain period of time before the price reduction must be stated.

The previous price is the lowest price that the dealer applied within a period of at least 30 days before the price reduction was applied (§ 11 PAngV new version). This also puts a stop to the fake discounts mentioned. As a result, this means that the amount of discounts are visually smaller because they are based on the lowest price. But they represent the real discount. Stating the discount based on the RRP, on the other hand, does not represent a realistic saving. However, it is still permitted to refer to the manufacturer price.

Exceptions to new regulations on price reductions

The new regulation also has exceptions under certain conditions ( HERE and HERE )

Facilitating the sale of perishable food

In the future, when selling perishable foods, there will no longer be a need to state a new total price or basic price if the required total price is reduced due to an “imminent risk of spoilage” or an “imminent expiry of the shelf life” and this “is made apparent to consumers in an appropriate manner.” ( Section 9 Paragraph 3No. 3 PAngV). Until now, the obligation to state the basic price was only eliminated if there was a risk of spoilage. With the new price information regulation, on the one hand, it is not necessary to state the total price and, on the other hand, it is extended to perishable foods whose shelf life is expiring. This regulation is intended to counteract food waste and support sustainability efforts.

Prices for selective charging of electrically powered vehicles

The Price Information Ordinance was supplemented by a regulation in Section 14 Para. 2 PAngV new version, according to which operators of “publicly accessible charging points” that enable consumers to “selectively charge electric vehicles” must indicate the “work price per kilowatt hour” at the respective charging point. Through the second regulatory decision of the Federal Council, this regulation was supplemented by the “retrieval option for displaying the price on the display of a mobile device”.

Criticism of the new price information regulation

According to the German Trade Association (HDE), the amendment to the price information regulation for retailers is associated with considerable practical challenges and legal uncertainties. In particular, the association considers the new obligation to provide information about the lowest price of the past 30 days in the event of price reductions to be unnecessary and expects that many retail companies will initially be reluctant to offer price reductions as a result of the new requirements.

“With many thousands of items in the markets and online shops, it is an enormous task to archive the prices of the last 30 days and take them into account in the offer communication,” says HDE Managing Director Stefan Genth.

HDE: Customers already adequately protected

The new obligation under the amended price information regulation to inform consumers about the lowest price of the past few days when advertising price reductions is unnecessary. After all, customers are already sufficiently protected from misleading information in connection with price advertising by the fair trade regulations.

“The new requirements complicate price labeling in the event of price reductions without increasing the level of consumer protection,” Genth continued.

In addition, advertising price reductions in certain media is made significantly more difficult, as there are limits to the announcement of the previous price on radio or television. Certain forms of price advertising such as “20 percent off everything” would also be questioned, as labeling all products in the range with a reference price is completely impractical.

Fewer discount promotions?

“There are already numerous uncertainties in the application of the law that need to be clarified by case law. “Many retailers will probably initially hold back on price reductions or forego certain forms of advertising,” says Genth.

The HDE also considers the standardization of the basic price information for small containers set out in the Price Indication Ordinance to be disproportionate.

“Instead of 100 grams or milliliters, the basic price of small containers will in future be calculated in kilograms or liters. Retailers therefore have to renew the price labeling in a large part of their product range. A change that involves considerable effort,” emphasizes Genth.

In addition, the new regulation does not create any added value for consumers. Rather, the basic price stated in kilograms or liters significantly distorts the price differences when comparing prices and can cause uncertainty among customers.

“Most consumers are used to the basic price in 100 grams or milliliters for small containers. The fear is that the new calculation will be confusing and give the false impression of high prices,” Genth continued.

Source: HDE , Federal Ministry of Justice

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