Legal alert on Decree 239 on sales promotion

Decree 239 retains most of the goods and services prohibited from sales promotion under Decree 81, including alcohol, lottery products, cigarettes, breast-milk substitutes, medical examination and treatment services provided by public health facilities, educational services provided by public facilities or public vocational education institutions, and other goods and services banned from sale in Vietnam. However, Decree 239 narrows the restriction applicable to pharmaceutical products. Specifically, only prescription drugs remain prohibited from being promoted or used as promotional goods, except in sales promotion programmes conducted for pharmaceutical traders. Accordingly, non-prescription drugs may be promoted or used as promotional goods for consumers, subject to compliance with applicable sector-specific regulations. Prescription drugs may only be promoted or used as promotional goods in promotional activities conducted for pharmaceutical traders.

This amendment is expected to enable pharmaceutical manufacturers, importers, and distributors to expand promotional activities for non-prescription drugs, creating additional channels for product promotion and consumer outreach.

In line with the Government's policy to streamline administrative procedures in the trade promotion sector, Decree 239 removes the promotional notification requirement for customer loyalty programmes under which customers are rewarded based on the quantity or value of goods purchased or services used, as evidenced by membership cards, purchase records, or other similar forms. Accordingly, businesses are no longer required to submit a promotional notification to the provincial Department of Industry and Trade when implementing customer loyalty programmes.

Following this amendment, the promotional notification requirement will generally remain applicable to sales promotion programmes involving the sale of goods or provision of services accompanied by prize-winning entry forms, where the total value of prizes and gifts is VND100 million or more, and the programmes are not conducted through e-commerce trading platforms, e-commerce platform applications, online promotion websites, or online promotion applications.

From a business perspective, this amendment is expected to facilitate the implementation of customer loyalty programmes by reducing administrative formalities and compliance costs, while providing greater flexibility in developing, modifying, and applying customer relationship management policies. Businesses may therefore respond more promptly to market demand, improve customer experience, and increase the effectiveness of their trade promotion activities.

Under Decree 81, the total duration of sales promotion in the form of price discounts for a particular good or service must not exceed 120 days in a year, excluding the duration of discount programmes conducted under concentrated sales promotion programmes or trade promotion programmes decided by the Prime Minister. This restriction limited businesses’ flexibility in designing promotional strategies, particularly in industries where discount campaigns are frequently implemented in response to seasonal demand, business strategies, or market fluctuations.

To address this constraint, Decree 239 abolishes the aggregate duration limit applicable to price discount programmes. The new provision enables businesses to take a more proactive approach in designing and implementing such programmes with a duration and frequency appropriate to their business objectives. This is particularly relevant for the retail, e-commerce, and consumer goods sectors, where price discount programmes are often conducted throughout the year to meet market demand and maintain competitiveness.

Decree 239 introduces the following amendments relating to promotional games of chance:

• First, clarification of the form of customer witnessing during the winner determination process.
  The new provision clarifies that customers may witness the winner determination process either in person or online, rather than merely requiring the process to be conducted with the participation of customer witnesses. This amendment reflects market practice, where an increasing number of promotional programmes are conducted on digital platforms or through hybrid formats combining online and in-person participation. The recognition of online witnessing does not alter the requirement to ensure the transparency and fairness in the winner determination process, but provides a clearer legal basis for businesses to use technology in organising promotional programmes, while providing greater flexibility and reducing organisational costs.
• Second, revision of the criteria for determining unclaimed prizes for the purpose of fulfilling the obligation to remit 50% of the prize value to the State budget.
  Decree 239 introduces an exception for prizes awarded after the expiry of the prize-awarding period due to a force majeure event or an objective impediment as prescribed by law. Previously, where the prize-awarding period expired and a prize remained unclaimed or no winner was identified, the enterprise could be required to remit 50% of the corresponding prize value to the State budget, including cases where the delay resulted from circumstances beyond its control. The new provision addresses this issue by introducing a specific exception, thereby ensuring that the financial obligation arises only where the enterprise is genuinely unable to award the prize in accordance with the rules of the promotional programme, rather than being triggered solely by the expiry of the prescribed time limit.