German supermarket Aldi's fake discounts breach EU law, top European court says

German supermarket Aldi Süd breached EU consumer law by claiming fake discounts on common groceries like bananas, the EU’s top court has found.

The company, the arm of the supermarket chain that serves southern Germany, was accused of raising prices merely in order to cut them again, while claiming in its promotional fliers to be offering a “shock price” reduction.

Traders are “prevented from misleading the consumer by increasing the price charged before announcing a price reduction and thus displaying false price reductions,” the EU Court of Justice ruled Thursday.

Price reductions in the form of a percentage “must be determined on the basis of the lowest price applied by the trader during a period not shorter than 30 days prior to the application of the price reduction,” the court said.

The case was brought by a consumer organisation in Baden-Württemberg on the basis of ads in which Aldi claimed to have cut banana prices by 23%.

In reality, the small print showed that the price was no lower than at other times during the last month, breaching Brussels’ rules on price indications and unfair commercial practices, the organisation said.

In a statement released after the ruling, Cornelia Tausch, head of the consumer group that brought the case, said Aldi had used a “trick” to circumvent EU law, and hailed the clarity and stronger rights the judgment brought.

Aldi argued those laws merely required it to show previous prices, rather than dictating the details of how it presents ads.

Aldi Süd did not immediately respond to a request for comment.

This article was amended at 12:00 to include the statement from Tausch.