On 22 May 2018, the Government issued Decree 81/2018 on trade promotion activities. Decree 81/2018 will take effect from 15 July 2018 and replace Decree 37/2006. Decree 81/2018 introduces new regulations relating to promotion activities. In particular,
- Traders must not promote their products by directly comparing with products of other traders for any purpose. Previously, promotion by comparison among products is only prohibited if the promotion is for purpose of unfair competition. However, such purpose is abolished in Decree 81/2018 so the restriction in comparative promotion is stricter;
- There is a new maximum rate for promotion activities in mass/concentrated promotion programs (chương trình khuyến mại tập trung). In case of mass promotion programs, the maximum value of goods and services used for promotion and maximum discount rate for promoted goods and services can be 100% of the value of such promoted goods and services. Previously, the maximum rate of the value of goods and services used for promotion and the maximum discount rate in all circumstances can be 50%;
- Money can be used as goods, services for promotion except the case of giving the samples free of charges to customers, giving goods as gifts or selling goods or providing services at prices lower than previous price;
- Total duration of promotion by discount for a certain goods or services does not exceed 120 days in a year and does not include promotion sale in mass promotion programs and promotion activities approved by the Prime Minister. In Circular 37/2006, duration of promotion by discount cannot exceed 90 days per year and 45 days for one promotion program;
- Regarding promotion by games of chance, Decree 81/2018 has provided specific conditions of evidence to determine the prize winners such as this evidence being in material form (ticket, electronic information, etc.) and being different to the lottery exclusively issued by the State. There is no limitation of duration of promotion in the form of games of chance under Decree 81/2018. Time limit and procedure for submitting 50% of prize value to state budget in case of no prize winners is detailed under Decree 81/2018;
- Article 15.2 of Decree 81/2018 specifies obligation of traders providing e-commerce trading platform and online promotion website. Particularly, among others, they must request traders in the platform to provide information of promotion, be responsible as the third party in provision of promotion information for consumers;
- In case of sale of goods/ service with promotion by contest forms and games of chance, the prize must be announced within 45 days from the end date of promotion duration, instead of 30 days as provided under Decree 37/2006; and
- Informing of promotion programs (except promotion by games of chance) to competent authority is not required if total value of prize and gifts is under VND 100 million, or promotion is on e-commerce trading platform and online promotion website. This provision could potentially reduce much paperwork for small businesses with small scale promotion campaigns.
This post is contributed by Le Minh Thuy, a legal trainee at Venture North Law Limited.