A ‘happy hour’ for Belgian retailers: Legislature abandons strict rules on how to announce price reductions

On 16 October 2015, the Belgian Parliament voted a law modifying the Belgian Code of Economic Law. The modifications should enter into force on 1 November 2015. One of the most relevant modifications concerns the announcements of price reductions.

Up until now, any price reduction had to refer to the lowest price applied in the month preceding the start of that price reduction. Price reductions could not apply for more than one month or less than one full day.

As you may remember, Belgium was condemned by the Court of Justice of the EU on 10 July 2014 because the strict rules on how to announce price reductions were deemed contrary to Directive 2005/29 regarding unfair market practices. As a direct consequence of this decision, the legislature has now abolished articles VI.18–VI.21 of the Code of Economic Law.

As from 1 November 2015, undertakings will have more freedom to announce price reductions, provided the consumer is not misled. They will be allowed to refer to any previously applied price (not only to the price applied one month earlier) and the announcements will also be valid for a period exceeding one month or apply for a period shorter than one day. This makes the ‘happy hour’, when bars announce a price reduction at a certain hour every day, finally legal.

The same principles apply during the sales periods. But article VI.26 §1 of the Code of Economic Law still stipulates that only products offered for sale in the 30 days preceding sales periods can be offered ‘on sale’ during the official sales periods in January and July of each year. The price reduction during the sales period must no longer refer to the price applied during the 30 days preceding the sales.

In practice, this makes it possible to reduce prices for longer periods (e.g. three to six months) and to have successive price reductions. As long as the consumer is correctly informed and is not being misled, such announcements of price reductions will soon be lawful in Belgium.