Opinion on the proposal for a European Parliament and Council Directive on consumer protection in the indication of the prices of products offered to consumers

(96/C 82/08)

On 8 August 1995 the Council decided to consult the Economic and Social Committee, under Article 129a of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Protection of the Environment, Public Health and Consumer Affairs, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on

28 November 1995. The Rapporteur was Mr Folias.

At its 331st Plenary Session (meeting of 20 December 1995), the Economic and Social Committee adopted the following Opinion by a unanimous vote.

1. Introduction

1.1. Consumer protection through the supply of accurate information on prices of goods offered to consumers at retail level is governed in the case of foodstuffs by Council Directive 79/581/EEC of 19 June 1979 on consumer protection in the indication of the prices of foodstuffs (), as amended by Council Directive 88/315/EEC of 7 June 1988 (), and in the case of non-food products by Council Directive 88/314/EEC of 7 June 1988 on consumer protection in the indication of the prices of non-food products (). The European Parliament and Council Directive 95/58/EC of 29 November 1995 () amending the above-mentioned Directives is also relevant here. It basically extends the force of these Directives by two years.

1.2. The starting-point for this Opinion was the conviction that the interests of all those involved in the market place, i.e. producers, traders and consumers, are best served when transparency and good operating conditions prevail in the market. This approach provides guidance for establishing balanced solutions in promoting the justified, but conflicting, interests of the abovementioned groups.

1.3. Furthermore, it is clear that market transparency and accurate information operate in favour of consumer protection and healthy competition between firms and between goods. It is also clear that producers and traders are themselves consumers. And the activities of consumers, traders and producers are always interdependent.

2. Present situation

2.1. There is a general obligation to indicate both selling and unit prices for products offered for retail sale. This aims at giving the consumers the information needed for comparing prices of similar products.

2.2. However, during the past seven years, it has emerged that the provisions of the directives regarding standardized ranges, as well as exceptions, were so complex that a number of countries did not transpose this legislation into national law.

2.3. These exceptions are as follows:

- when products are sold in standardized Community ranges;

- Member States may exempt certain categories;

- Member States may exempt categories of prepackaged products in pre-established quantities, which are not listed in the Annexes to the Directives;

- Member States may exempt categories when indication of unit prices would be meaningless;

- exemptions may be granted for small retail shops when the obligation would constitute an excessive burden or be impracticable.

2.4. Owing to the potential exemptions listed above, and to the less than unanimous acceptance of establishing ranges as an alternative to unit pricing, we have reached the point where a number of Member States had difficulties in implementing the regulations on price indication within the deadline of 6 June 1995.

2.5. It is comforting that the Commission evaluated the situation and realized that, firstly, the deadline should be extended and, secondly, some drastic changes to the current rules should be made in deference to the subsidiarity principle and the consumers' right to information on prices.

2.6. In order to find a common denominator to conflicting opinions and wishes of Member States without undermining consumers' rights, the Commission found a 'Columbus egg' solution; that is, to propose to break the link between unit price and ranges.

3. General comments

3.1. The proposed (simplified) Directive on the indication of the prices of products offered to consumers:

- establishes a general obligation to indicate the selling price and the unit price on foodstuffs and non-food products offered for retail sale (Articles 1 and 3 of the proposed Directive);

- allows for exemption of products where indication of the unit price would be pointless [Article 6(1)] and products sold by individual item or singly [Article 6(2)];

- abolishes the existing relation of dependence between indication of the unit price and the existence of predetermined ranges of package size, making it compulsory to indicate the unit price in the case of products prepackaged in pre-established quantities ('ranges') too.

3.2. The Committee feels it is quite right to take Article 129a(2) of the Treaty as the legal basis for the proposed Directive.

3.3. There is clearly an immediate need to implement arrangements to provide accurate, transparent and unambiguous information about the prices of products offered for retail sale.

3.4. It should not be obligatory to indicate the selling price and unit price on the product itself; it should also be permissible to indicate both prices on the shelf. Particularly in the case of small retailers, who often have limited shelf space, it should be permissible to indicate the two prices of groups of similar products on a price list displayed in an easily visible place in the shop.

3.5. It is suggested that, after introduction of the single Community currency and during the proposed six-month transitional period when prices will have to be indicated temporarily in both the national and the Community currency, three prices should be indicated:

- the selling price in the national currency;

- the selling price in the single Community currency;

- the unit price in the single Community currency.

3.6. This system would be satisfactory because comparison of unit prices expressed in the same currency is always possible regardless of what that currency is.

It would also help citizens to adapt more quickly and effectively to the introduction of the single Community currency.

3.7. Although the link between unit prices and ranges is to be abolished, producers and distributors who have already established package sizes based on ranges can continue to use these, provided of course they conform to the rules on the indication of unit price contained in the proposed Directive.

The Commission is also urged to continue its efforts to encourage those sectors of business or firms which have already made a start in establishing the proposed European ranges and wish to see them developed further.

3.8. As regards Article 6(3) of the proposed Directive, the ESC would suggest that, in the case of non-food products, the Member States should be obliged, rather than just entitled, to establish a positive list of products to which the obligation to indicate the unit price shall apply. A practical way of going about this would be to list each item according to its Common Customs Tariff number (NIMEXE). This would provide a common point of reference for all Member States, and any new product produced or imported would immediately be given a number and automatically included in or excluded from the list.

There is the danger that Member States will include different products in this table, that is, making use of the option given in Article 6(3) in such a way that, ultimately, the level of consumer protection will differ markedly from one country to another, which would not be in keeping with the spirit of the proposed Directive. The ESC, therefore, invites the Commission and the Council to examine the problem and to find legal or other means of persuading Member States to maintain the minimum common level of protection presupposed by the Directive. In so doing, they will of course be able to take as a basis the exemption criteria established by Article 6(1) and (2) of the draft Directive (products for which indication of the unit price would be meaningless, products for which such indication would not provide the consumer with adequate information or would be liable to create confusion, etc.).

3.9. The extra four-year period allowed for small businesses to conform (Article 7 of the proposed Directive) is acceptable and justified. Nevertheless, the following points should be emphasized:

Since the objections raised by small businesses are due to an exaggerated 'fear of the unknown', the ESC suggests that the Commission

1) fund a programme to educate small retailers which will be managed and implemented in each Member State by the relevant national trade confederation or confederations. The Commission will collaborate with the relevant confederation or confederations, supervising and checking their implementation of such programmes;

2) at its own liability and expense, but in collaboration with the relevant trade confederation or confederations in each Member State, publish information leaflets addressed to small retailers explaining things in simple, practical and comprehensible terms and suggesting solutions to the problems they face.

3.10. It must be made clear that the transitional period allowed for Member States to conform to the Directive [Article 10(1)], which ends on 6 June 1997, is not two years, as the Commission claims, since the time-lapse between publication of the new Directive and 6 June 1997 will be about one year. The ESC asks the Commission to find an appropriate legal means of ensuring that the two-year period will actually be two years, and at the same time to include a provision in the Directive calling on Member States to incorporate said Directive into their national legislation within six months of its publication.

3.11. As regards Article 11 of the draft, it is suggested that the Commission should draw up three reports on implementation of the provisions of the Directive. In addition to the two already provided for, a third report should be submitted one year after the Directive comes into force. This will be of considerable help in the timely and correct implementation of the Directive across the whole range of commercial businesses (large, medium-sized and small).

3.12. The ESC hopes to be closely involved in the drawing-up of these three reports.

4. Specific comments

4.1. Article 11 of the proposed Directive should be amended to read as follows:

'1. One year after the date referred to in Article 10(1), the Commission shall submit to the European Parliament, the Council and the ESC an initial report on the application of the provisions of this Directive.

2. Two years after the date referred to in Article 10(1), the Commission shall submit to the European Parliament, the Council and the ESC a second report on the application of the provisions of this Directive.

3. Four years after the date referred to in Article 10(1), the Commission shall submit to the European Parliament, the Council and the ESC a third report on the application of the provisions of this Directive.'

5. Summary of the Opinion

5.1. Consumer protection through the supply of accurate information on prices of goods offered for retail sale to consumers is governed by Directive 79/581/EEC, as amended by Directive 88/315/EEC, Directive 88/314/EEC and Directive 95/58/EC amending the above-mentioned Directives.

5.2. The ESC's point of departure in drawing up this Opinion was the conviction that the interests of all those involved in the market are better served when conditions of transparency and proper operation prevail. Moreover, such conditions provide equal protection for both the consumer and healthy competition.

5.3. The ESC accepts the breaking of the link between the obligation to indicate the unit price and the existence of 'ranges'.

5.4. The ESC calls for it to be permissible to indicate the selling price and the unit price not only on the product or on the shelf, but also on a centralized price list displayed in an easily visible place in the shop, in the case of small retailers.

5.5. For the transitional period when the single Community currency is being introduced, the ESC proposes that three prices be indicated for each product:

a) the selling price in the national currency;

b) the selling price in the single currency;

c) the unit price in the single currency.

5.6. The ESC proposes that those who have already established package sizes based on ranges should be allowed to go on using them, indicating the unit price for them as well.

5.7. The ESC wishes to see an obligation on the Member States to draw up a positive list of products for which indication of the unit price is obligatory, as soon as the Commission has provided for 'safety valves' to avoid excessive disparities between such national lists.

The ESC proposes as a practical, uniform approach the listing of each item according to its Common Customs Tariff number (NIMEXE).

5.8. To help small retailers overcome any difficulties in conforming, the ESC suggests that the Commission fund:

a) programmes to inform small retailers;

b) the production and publication of information leaflets for them.

5.9. The ESC calls upon the Commission to ensure that the two-year period of adaptation to the new Directive runs from the date of its publication and not as from 7 June 1995.

It also asks the Commission to take measures to oblige the Member States to transpose the Directive into their national laws within six months of the date of its publication.

5.10. The ESC proposes that three reports (instead of two) be drawn up on the implementation of the Directive, with the active participation of the ESC itself: the first one year, the second two years and the third four years after the date of publication of the Directive.

Done at Brussels, 20 December 1995.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No L 158, 26. 6. 1979, p. 19.

() OJ No L 142, 9. 6. 1988, p. 23.

() OJ No L 142, 9. 6. 1988, p. 19.

() OJ No L 299, 12. 12. 1995, p. 11.