Guidelines for Price Reduction Campaigns Under CCA

When conducting price reduction campaigns prescribed by the Croatian Consumer Act (CCA), the retailers in Croatia must adhere to specific guidelines. The CCA outlines several types of sales that retailers are allowed to conduct, including sales promotion, clearance sale, seasonal sale, sale of defective goods, and sale of goods with an imminent expiry date. In order to avoid engaging in unfair or misleading commercial practices, retailers must ensure that they meet the statutory conditions for these types of sales.

When announcing price reductions, retailers must provide clear, visible, and legible information about the conditions of the sale. This includes indicating the minimum information required for the specific type of sale, such as the price indication and the period of the sale. For example, the price indication must include the reduced price and the lowest price at which the item was offered in the 30 days period before the price was reduced.

Another requirement that needs to be taken into account is the obligation to indicate currency in both HRK and EUR until the end of 2023.

Retailers must also be mindful of the limitations on the period of a price reduction campaign. Seasonal sales can only be introduced twice annually and each time for a maximum of 60 days. Clearance sales can only be announced in specific circumstances, such as the termination of the retailer's business activities or the sale of a specific product. The sale period must also be clearly noted and it needs to be taken into account the period limitations depend on the specific circumstances.

In addition to following the guidelines set out in the CCA, retailers must also make sure they don't cross into the area of unfair competition practices. The goods must not be sold under their wholesale price (including VAT) except in specific situations, such as when the goods are due to expire soon or when the price is being reduced for specific reasons by which the retailer is not undertaking actions that limit or obstruct competition on the market.

Significant monetary sanctions follow for / threaten those who do not comply with the above rules. The CCA provides for fines ranging from HRK 10,000 (approx. EUR 1,326 ) to HRK 200,000 ?(approx. EUR 26,510)?for legal entities, HRK 5,000 (approx.?EUR 660) to HRK 15,000 (approx. EUR 1,990)?for responsible individuals in legal entities, and HRK 5,000 ?(approx. EUR 660) to HRK 15,000 (approx. EUR 1,990)?for natural persons. There is also a risk of other sanction, such as the competent authority temporarily prohibiting the retailer from selling goods until the identified irregularities are remedied. Retailers should also be aware that other fines may be imposed under other legislation regulating the sale of goods, such as the Croatian Trade Act.

It is also important for retailers to keep accurate records of their price reduction campaigns, including the dates of the sale, the products and prices involved, and any other relevant information. This will help retailers to demonstrate compliance with the relevant legislation and will also help in the event of any disputes or investigations.

In addition to the legal requirements, retailers must also consider the potential impact of their price reduction campaigns on consumer perceptions and behaviour. The campaigns should be clear and easy to understand for consumers, and should not create confusion or mislead consumers in any way.

A proactive and responsible approach to price reduction campaigns is expected from the retailers to comply with legal requirements, protect consumer interests, and maintain a positive reputation in the market.?