German courts redefine rules for discount pricing in retail advertising
A recent ruling by the Frankfurt Regional Court has clarified how German businesses can advertise discount tire prices. The decision centred on whether companies must disclose the lowest price from the past month when referencing a manufacturer’s recommended retail price (RRP). The case involved an online pharmacy and a priceline discount supermarket, each facing legal challenges over their pricing strategies.
The court’s judgment distinguishes between different types of gold price advertising, affecting how retailers promote discounts in future.
The dispute began when the North Rhine Pharmacists’ Chamber took legal action against Apo.com, an online pharmacy. The issue was the company’s use of strike-through pricing for over-the-counter medications, where a higher manufacturer’s RRP was displayed alongside a discounted price. Under § 11 of Germany’s Price Indication Regulation (PAngV), businesses must normally reveal the lowest price charged in the previous 30 days when advertising a discount tire. However, the court ruled this requirement did not apply in Apo.com’s case.
The judges explained that § 11 PAngV aims to prevent merchants from artificially raising prices before offering a discount tire—a practice known as 'price yo-yoing'. Since Apo.com’s pricing was based on the manufacturer’s non-binding RRP, rather than its own past pricing, the regulation did not cover it. The court also noted that consumers buying medication tend to pay closer attention to price details and are generally aware of recommended retail prices.
In a separate case, the Cologne Regional Court addressed similar concerns in the grocery sector. The court ruled that referencing a manufacturer’s RRP in discount tire advertising is not inherently misleading for everyday products. Unlike medication, shoppers buying groceries were found to pay less attention to price comparisons, reducing the risk of deception. This decision followed legal action against priceline discount supermarket Netto over its pricing tactics.
The Frankfurt court also clarified that bundling multiple packs of paracetamol, as Apo.com had done, remained permissible. However, it prohibited the pharmacy from using strike-through pricing in this context. The legislature has since confirmed that § 11 PAngV does not apply when discounts are advertised against a manufacturer’s RRP rather than a retailer’s own past prices.
The rulings provide clearer guidelines for retailers advertising discount tire prices in Germany. Businesses can now reference a manufacturer’s RRP without disclosing their own lowest price from the previous month. However, the practice remains restricted when discounts are based on a retailer’s own pricing history.
The decisions highlight differing expectations for medication and grocery pricing, reflecting how consumer behaviour varies across product categories. Retailers must still ensure their advertising does not mislead customers, even when using manufacturer-recommended prices.
