New brands could face a "tax" on launch advertising when the European Union’s Directive on Unfair Commercial Practices (UCP) becomes law later this year, warns the Incorporated Society Of British Advertisers (ISBA).
The UCP will probably require ads deemed to be an "invitation to purchase" to include extra information, such as the address and phone number of the manufacturer.
However, at a Department of Trade and Industry (DTI) seminar in London last month, Giuseppe Abbamonte, head of DG SANCO, the European Commission directorate responsible for the UCP directive, said the requirement would probably be waived for well-known brands.
ISBA director of public affairs Ian Twinn says: "If that is correct, then it means new entrants will have to pay more to advertise than brands already present in the market."
ISBA, the Advertising Association (AA) and the DTI had hoped to defuse the issue by getting the EC to change its interpretation of what constitutes an "invitation to purchase". The EC says an ad is an invitation to purchase if it includes some product description and a price.