Discount Supermarket Netto's Coffee Ad Under Fire: What's the Scoop? The Federal Court of Justice Weighs in on Net Price Advertising
- Let's chat about... BGH's hardline stance on clear and transparent pricing in the world of discount supermarkets, as the Federal Court of Justice in Karlsruhe sifted through the Conservation Center's lawsuit against Netto.
Strategize low prices - but how do Netto ads effectively lure customers? BGH scrutinizes Netto's promotional strategies. - Issues under consideration by the Commission have been outlined:
In the hot seat this time around is the discount supermarket, Netto, with the Federal Court of Justice (BGH) playing judge, jury, and executioner. The court in Karlsruhe is grappling with a pressing question: just how should price-slashed ads be structured?
The Conservation Center, a keen watchdog of the retail industry, has lit a flame under the discount supermarket due to a coffee advertisement by Netto that catches the eye first, then leaves customers scratching their heads. The issue in question? A gross violation of the Price Indication Ordinance. According to this rule, merchants promoting price cuts are obliged to also present the least expensive price requested for the product within the previous 30 days. The precise method of displaying this "reference price" has been a point of contention for quite some time, with many weighing in on whether a footnote is adequate.
Netto's coffee ads, decoded:In their ads, Netto boldly proclaimed a 36% price reduction on a coffee, with the current and previous week's prices clearly stated. However, the crucial reference price of 4.44 euros within the last 30 days could only be found in the fine print.
The foggy waters of the law:The playing field isn't exactly favorable for Netto at the moment. Both lower courts have backed the Conservation Center's position. The European Court of Justice (ECJ) in Luxembourg had already settled this matter in September, ruling that "Price Highlight" advertising must always refer to the lowest price of the previous 30 days and that discount percentages must be calculated accordingly. Based on this ECJ decision, the Netto ad would be deemed inappropriate.
Sounding the alarm:"I suspect the Federal Court of Justice will also ban this ad, just like the lower courts, because the reduction in percentage does not refer to the reference price," said Reiner Münker, Managing Director of the Conservation Center, following the court hearing on Wednesday. The ad's issue lies in twofold: first, it flouts the ECJ decision by not referring to the reference price, and second, the display of various old and new prices is too confusing and difficult for the average consumer to parse.
Who's who:
- Federal Court of Justice (BGH)
- Netto
- Karlsruhe
- Discounter
- ECJ
- Competition Center
Stay tuned for the BGH's verdict on this intriguing case – we'll keep you posted!
- The Federal Court of Justice (BGH) is examining the legality of Netto's advertising practices, particularly regarding the clarity and transparency of price reductions on goods, such as coffee, as per the Price Indication Ordinance.
- In this case, the focus is on Netto's ad compliance with the European Court of Justice (ECJ) ruling, which mandates that price-slashed ads must always refer to the lowest price of the previous 30 days and that discount percentages must be calculated accordingly. If Netto's ad does not meet these requirements, it may be deemed inappropriate by the BGH.
