Aldi-Sud is currently undergoing the refunding procedure
In a dispute concerning deceitful promotions, discount supermarket Aldi Süd encountered a setback at the highest European court. When they promote discounts in pamphlets, for instance, they must base them on the lowest price over the previous 30 days, as ruled by the European Court of Justice (ECJ). This is to prevent merchants from misleading consumers by first hiking prices and then reducing them, thereby advertising "fake discounts".
The legal battle stemmed from an action by the consumer protection agency in Baden-Württemberg. They applauded the court's decision and anticipate greater openness for consumers, expecting more honesty from retailers. However, the retail industry predicts adverse consequences for both customers and traders following the ECJ ruling. Aldi remained silent on the decision.
In this specific case, the slogan "Germany's best price" was utilized for bananas and pineapples. The ECJ identified a "price highlight" of 1.49 euros per piece for pineapples, with a crossed-out price of 1.69 euros. However, it was disclosed in tiny print that the lowest price over the previous 30 days was actually 1.39 euros, which was lower than the "price highlight". For bananas, a 1.29 euros per kilogram price was advertised, with a 23% discount and a crossed-out price of 1.69 euros. Here too, the supermarket revealed in small print the lowest price over the previous 30 days, which was equivalent to the present price.
Since approximately two years ago, retailers have been required to specify the lowest price over the previous 30 days for every discount. However, the consumer protection agency argued that discounts should be based on the lowest price, not simply the rate immediately prior to the launch of the offer.
Retail Association: Fewer Discounts in the Future
According to Cornelia Tausch, vice-president of the consumer protection agency in Baden-Württemberg, Aldi Süd cannot merely indicate the lowest price over the previous 30 days without applying the discount to it. "By employing this technique, Aldi deceptively claimed to offer an authentic price reduction, but in reality, the crossed-out price likely only rose briefly beforehand in order to subsequently promote an appealing price reduction," she criticized.
The judges in Luxembourg mostly concurred with this assessment. The court in Düsseldorf now has to make a decision in the specific case, taking into account the ECJ's ruling. Aldi Süd declined to comment on the ruling. "We appeal for understanding that we do not comment on ongoing proceedings as a matter of principle."
From the perspective of the German Retail Association (HDE), the ECJ's decision has negative implications for both customers and merchants. The possibilities for shops to advertise special offers will be "unreasonably restricted", stated Peter Schröder, the HDE's head of legal and consumer policy. "As a consequence, there will be fewer price reductions. Bargain hunters will have fewer opportunities to stretch their household budget with targeted purchases of special offers." Subsequently, the average price level will increase for all customers.
In a similar case, the Higher Regional Court of Nuremberg likewise supported the consumer's perspective. A trade association initiated a lawsuit against a discount store. The retailer had advertised a "30-day price guarantee" and a discount of minus 36% compared to the previous price for a specific coffee powder. The coffee now cost 4.44 euros instead of the previous 6.99 euros. However, the consumer could only determine this via a complex-to-decipher footnote, which established that the coffee had been on offer for 4.44 euros for two weeks, which encompassed the mentioned 30-day period. The Higher Regional Court of Nuremberg considered this combination of price information to be misleading advertising.
The ECJ's ruling concerning Aldi Süd's promotional tactics could potentially lead to fewer discounts in the future, as suggested by Peter Schröder, the head of legal and consumer policy at the German Retail Association (HDE). This could limit opportunities for bargain hunters to stretch their household budget with targeted purchases of special offers.
Additionally, the dispute around Aldi Süd's use of 'Germany's best price' slogan for bananas and pineapples highlights the importance of transparent pricing. Retailers are now required to apply discounts to the lowest price over the previous 30 days, as stated by Cornelia Tausch, vice-president of the consumer protection agency in Baden-Württemberg, to prevent misleading consumers with "fake discounts".
