Regulations on principles for conducting promotions according to Vietnamese law

Can agents conduct their own promotional programs for the principal’s goods and services?

1. What principles must be followed when conducting promotions?

Pursuant to Article 3 of Decree 81/2018/ND-CP stipulating the principles for conducting promotions as follows:

“Article 3. Principles for implementing promotions

1. Promotion programs must be carried out legally, honestly, publicly, transparently and securely. protect the legitimate rights and interests of consumers, other merchants, organizations or individuals.

2. Merchants conducting promotions must ensure favorable conditions for winning customers to receive prizes and are obliged to resolve complaints (if any) related to the promotion program.

3. Merchants conducting promotions are responsible for ensuring the quality of goods Promotional goods and services and goods and services used for promotion.

4. The implementation of promotions must ensure:

a) Do not impose a condition for customers to enjoy the promotion that they must give up, refuse or exchange goods and services of other traders or organizations;

b) There is no direct comparison of goods and services. with goods or services of other traders, organizations or individuals.

5. Do not use lottery results to determine winning results, as a basis for giving away or rewarding in promotional programs in the form prescribed in Clause 5, Clause 6 and Clause 9, Article 92 of the Commercial Law.”

2. Is an agent allowed to conduct promotional programs for the principal’s goods and services?

Pursuant to Article 2 of Decree No. 81/2018/ND-CP stipulating the subjects conducting promotions as follows:

“Article 2. Subjects of application

1. Traders conducting promotions, including:

a) Traders producing and trading in goods and services that directly conduct promotions or conduct promotions through distributors (wholesalers, retailers, agents, franchisees and other distributors according to the provisions of law);

b) Traders providing promotional services that conduct promotions for the goods and services of other traders as agreed with the trader that.

2. Traders who directly organize trade fairs and exhibitions, including:

a) Traders who organize trade fairs and exhibitions or organize for other traders, organizations and individuals to participate in trade fairs and exhibitions (traders providing trade fair and exhibition services);

b) Traders who directly or hire traders other organizations organize trade fairs and exhibitions for their own products and services.

3. Organizations and individuals engaged in trade-related activities and subjects with the right to conduct trade promotion activities specified in Article 91, Article 131 of the Commercial Law when carrying out trade promotion activities must comply with the provisions of this Decree and relevant legal regulations.”

Thus, according to point a, clause 1, Article 2 of Decree No. 81/2018/ND-CP, agents (or distributors) can carry out promotions like traders producing and trading goods and services.

3. When carrying out promotions, how must the maximum limit on the value of goods and services be guaranteed?

Pursuant to Article 6 of Decree No. 81/2018/ND-CP stipulating the maximum limit on the value of goods and services used for promotions as follows:

– The material value used to promote a unit of promoted goods or services must not exceed 50% of the price of that promoted unit of goods or services before the promotion period, except in the case of promotions in the forms specified in Clause 8, Article 92 of the Commercial Law, Article 8, Clause 2, Article 9, Article 12, Article 13, Article 14 of this Decree.

– The total value of goods and services used for promotion that traders conduct in a promotion program must not exceed 50% of the total value of the goods and services being promoted, except in the case of promotions in the form specified in Clause 8, Article 92 of the Commercial Law, Article 8 and Clause 2, Article 9 of this Decree.

– Value of goods and services used for promotion Promotion falls under one of the following cases:

+ In case the trader conducting the promotion does not directly produce or import goods or does not directly provide services used for promotion, the value is calculated by the price paid by the trader performing the promotion to purchase goods and services used for promotion or the market price of goods and services used for promotion at the time of announcement;

+ Goods and services used for promotion are goods that the trader directly produces, imports or provides services, the value is calculated by the cost price or import price of the goods and services used for promotion.

– In cases of organizing concentrated promotional programs (hours, days, weeks, months, promotion seasons), the maximum limit on the value of the goods is applied, Services used for promotion are 100%. The maximum limit on the value of goods and services used for 100% promotion is also applied to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.

– Centralized promotion programs as prescribed in Clause 4 of this Article include:

+ Programs presided over by state agencies (central and provincial levels) organize, within a determined period of time, in the form of hours, days, weeks, months, and promotional seasons to implement economic development policies with national and local goals. The state has a policy to encourage the organization of centralized promotional programs. All merchants have the right to participate in programs;

+ Promotions on holidays and New Year according to the provisions of labor law, including:

++ Lunar New Year: 30 days immediately before the first day of the lunar year;

++ Other holidays. The promotional period of each promotional period on holidays and New Year must not exceed the break time of the corresponding holidays and New Year according to the provisions of labor law.