Expanding promotions into Europe is about to get easier. The European Council is expected to pass the Proposed Regulation on Sales Promotions that will make many promotion laws consistent across the European Union’s 15 countries, streamlining work for U.S. marketers eager to travel overseas.

Approval could come as early as this quarter for the regulation, which was submitted by the European Commission in October 2002. If passed, the law will take effect Jan. 1, 2005.

The regulation will eliminate most bans on promotions, premiums, discounts, and sweepstakes. It introduces requirements for disclosures, consumer redress, and marketing to children, but those don’t seem problematic for most U.S. marketers.

The EU is a patchwork of laws now. Germany, Belgium, and Finland ban or restrict premiums. Finland and Italy limit retailer price cuts, and the Netherlands, Belgium, Ireland, Sweden, and France prohibit or seriously restrict sweepstakes. Some countries, like Spain and Italy, require pre-authorization from the government for certain sales promotions.

The new regulation will eliminate general prohibitions on sales promotions, most limitations on discounts, and pre-authorization requirements.

A major principle underlying the regulation is that consumer and trade promotions should be permitted as long as all relevant terms and conditions are “transparent” to consumers (or retail buyers, for trade promotions). To do that, the regulation requires marketers to disclose price (including all applicable taxes); promoter’s name and address; length of the promotion; conditions of the offer; and location of complete terms and conditions of the offer (which must be made available on request).

For premiums, marketers must disclose the premium’s value and all purchase conditions. There are additional disclosure requirements for discounts, coupons and sweepstakes, virtually all of them familiar to U.S. marketers. For example, sweepstakes must disclose:

• odds of winning
• final date for receipt of entries
• any restrictions or limitations, such as need for permission from parents (for children) or an employer (for trade promotions)
• all costs related to entry

The regulation also requires verifiable parental consent before marketers can collect data from children under 14, similar to the U.S.’s Children’s Online Privacy Protection Act. It will prohibit promoters from offering children premiums that are harmful to their health, or awarding alcoholic beverages as gifts or prizes to consumers under 18.

The law also requires promoters to respond to consumer complaints in writing within four weeks.

But the proposed regulation has some ambiguities. It doesn’t specify how disclosures must be made. For example, how close must disclosures be to a discount offer at retail? Can a TV spot make disclosures visually, or must it include sound? Who can request an offer’s terms and conditions? How long does a marketer have to respond to requests? Those ambiguities can be clarified before the regulation takes effect.

U.S. marketers should start making travel plans now.

John P. Feldman and Natalie L. Smith are partner and associate, respectively, with law firm Collier Shannon Scott, Washington, DC. Feldman manages Collier Shannon’s PromotionLawPlaybook.com. Reach him at [email protected].

Calgary, Alberta-based event marketer Xentel DM, Inc. gained a foothold in the U.S. with the purchase of assets from two Ft. Lauderdale, FL-based event marketing outfits. The deal involves the acquisition of all outstanding shares of Advanced Technology Concepts, Inc., and certain assets and liabilities of Gehl Corp. Xentel will receive client contracts, customer databases, multiple call-center locations, and other event marketing assets. Gehl Corp. creates, markets, and presents cause-related events in partnership with U.S. public service organizations in 31 states. Xentel plans to stage 200 events this year.