4 things you should know about goods used for sale promotion in Vietnam

Hi Lawnet. May I ask, according to the law in Vietnam, what conditions must be met for goods to be used for sales promotion? -Thanh Binh (An Giang, Vietnam)


4 things you should know about goods used for sales promotion in Vietnam

1. What are goods used for sales promotion?

According to Clause 1, Article 94 of Vietnam's Commercial Law 2005, goods used for sales promotion mean those given as gifts or prizes or provided free of charge by traders to customers.

2. Conditions for goods used for sales promotion

Article 94 of Vietnam's Commercial Law 2005, Article 5 of Decree 81/2018/ND-CP stipulates the conditions for goods used for sales promotion as follows:

- Goods and services used by traders for sale promotion may be goods and services they are trading in or other goods and services.

- Goods and services used for sale promotion must be those traded lawfully.

- Money can be used as goods used for promotion except for promotional cases as prescribed in Articles 8, Article 10, Article 11 of Decree 81/2018/ND-CP.

* Note: Goods used for promotion do not include:

- Alcohol;

- Lottery;

- Cigarette;

- Medicines for human use, including those permitted for circulation according to the regulations of the Ministry of Health (except for the case of promotion for drug traders);

- Goods banned from circulation in Vietnam;

- Other goods banned from promotion as prescribed by law.

3. Maximum value of promotional product in Vietnam

Article 6 of Decree 81/2018/ND-CP stipulates the maximum limit on the value of goods used for promotion as follows:

- The promotional value of a unit of promoted product must not exceed 50% of the price of such promoted product unit before the promotion, except for promotion in the forms prescribed in Clause 8 in Article 92 of the Commercial Law and Article 8, Clause 2 in Article 9, Article 12, 13 and 14 of Decree 81/2018/ND-CP.

- Total value of promotional product of a sales promotion program conducted by traders must not exceed 50% of total value of promoted product, except for forms of promotion prescribed in Clause 8 in Article 92 of the Commercial Law, Article 8 and Clause 2 in Article 9 of Decree 81/2018/ND-CP.

- The value of promotional product falls into of following cases:

+ For the case in which traders conducting sales promotion neither directly produce or import promotional goods nor provide promotional services:

The value of such promotional product will be equal to the price paid by traders doing sales promotion to purchase promotional products or the market prices of such promotional products at the time of publication.

+ For promotional products directly produced, exported or provided by traders doing sales promotion:

Their value will be equal to the buying price or import price of such promotional products.

4. The maximum value of goods used for sale promotion when there is a concentrated sale promotion

- For time-limited sales promotion (effective within certain frame of hours, days, weeks, months or seasons), the limit shall be 100% of the value of the promotional product.

Such limit shall also be applied to sales promotion activities included in programs or activities of sales promotion decided by the Prime Minister of Vietnam.

- Concentrated sales promotion programs include:

(1) time-limited sales promotion programs effective within certain frame of hours, days, weeks, months or seasons conducted by the central and provincial state agencies for the purpose of implementing economic development policies which covers national and local objectives. The State shall issue incentive policies for conducting concentrated sales promotion programs.

All traders are entitled to participate in such programs;

(2) Sales promotion programs on Tet holidays and other holidays as prescribed in the labor law include:

+ Sales promotion programs on Lunar New Year conducted 30 days ahead of the first day of lunar year;

+ Sales promotion programs conducted on other holidays.

Sales promotion period of each promotion program conducted on Tet holidays or other holidays shall not exceed the time for such holidays in accordance to the labor law.

 

(According to Clauses 4 and 5, Article 6 of Vietnam's Decree 81/2018/ND-CP)

Van Trong

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