Spanish stall Bolkestein’s sales liberalisation plans

Date: 17/01/02

By Peter Chapman

MADRID has dealt a blow to single market chief Frits Bolkestein's plans to liberalise sales promotions across the EU by halting talks in the Council of Ministers.

The blueprint aims to get rid of a raft of national rules that distort the single market for goods and services by restricting sales promotions - such as Germany's attempt to ban clothing giant C&A's ongoing 20 discount offer.

Under the proposed new law, companies launching sales campaigns outside their own member state would also be exempt from any remaining restrictions abroad - provided they complied with regulations at home.

Madrid wants to wait for diplomats to debate a potentially conflicting consumer protection effort, from Commissioner David Byrne, before continuing talks on sales promotion. Business groups, including the American Chamber of Commerce, have written to Spanish Economics Minister Rodrigo Rato in protest against the move.

Byrne's green paper, launched last October, moots the possibility of a new framework forcing companies to comply with a general duty to 'trade fairly'.

But critics argue that the fair trade plan would allow countries like Germany to keep laws banning discounts.

Diplomats say the Spanish presidency and a blocking minority of other member states, including France, also oppose a key part of the sales promotion law that would lift the ban on sales below cost price.

Bolkestein maintains that the current ban limits the freedom of companies to sell their goods.

However, the dissenting countries argue that lifting it would mean dismantling national rules protecting companies from predatory pricing.

Spain has halted talks in the Council of Ministers on plans to liberalise sales promotions across the EU.