New regulations on sales promotion

The Government recently issued Decree No. 81/2018/ND-CP detailing the Commercial Law regarding trade promotion activities, including sales promotion.

 

The Government recently issued Decree No. 81/2018/ND-CP detailing the Commercial Law regarding trade promotion activities, including sales promotion.

Accordingly, the decree stipulates the traders entitled to conduct sales promotion, including: 1- Traders engaged in the production and trading of goods and services directly conduct sales promotion or conduct sales promotion through their distribution traders (wholesalers, retailers, agents, franchisees and other distributors in accordance with the law); 2-Traders engaged in the trading of sales promotion services conduct sales promotion for the goods and services of another trader as agreed upon with that trader.

Principles of sales promotion 

Under the decree, sales promotion programs must be conducted in a lawful, honest, public and transparent manner, and must not harm legitimate interests and rights of consumers, other traders, organizations or individuals.

Promotion-involved traders must ensure favorable conditions for prize-winning customers to receive prizes and are obliged to settle complaints (if any) concerning their sales promotion programs.

Promotion-involved traders are responsible for guaranteeing the quality of promoted goods and services and those used for sales promotion.

The implementation of sales promotion must ensure: 1- Promotion-involved traders must not require customers entitled to sales promotion to give up, refuse, or exchange goods and services of other traders and organizations; 2- Promotion-involved traders must not provide direct comparisons between their goods and services and those of other traders, organizations or individuals for the purpose of unfair competition.

The decree also states that lottery results must not be used as a foundation to determine the prize winners, or to present or award bonuses in sales promotion programs in the forms specified in Clauses 5, 6 and 9 of Article 92 of the Commercial Law.

Regulations on sales promotion in the multi-level form

The decree stipulates that businesses which have not registered multi-level marketing activities must not conduct sales promotion in the multi-level form.

Multi-level marketing companies are allowed to conduct sales promotion in accordance with the law, but have to abide by the legal regulations on the management of multi-level marketing activities.

(Source:VGP)