C&A sales hit German legal snag

C&A - which has hundreds of stores across Europe - shut up shop in the UK last year

Dutch-owned clothing chain store C&A has fallen foul of a German law that limits when shops can sell cut-price goods.

A scheme designed to shorten queues at the tills during last week's euro changeover by offering discounts to customers using credit cards has been suspended on the orders of a German court.

A German anti-competition law aimed at protecting small businesses restricts how and when discount sales are allowed to take place.

"We wanted to speed up the process at the cash desk," a C&A spokesman told the BBC's World Business Report. "What we did is motivate the consumers to use the cards...We were sure that what we wanted to do would be legal."

But the store was forced to suspend the discount scheme after just one day when a court in Dusseldorf took out an injunction against it.

The company blames a lack of transparency in the German law - which forbids special promotions but allows rebates - following a reform of the rebate law last year.

Wider choice?

Advocates of the law say it protects small shops, whose existence ensures that consumers have a wider choice.

Consumers are entitled to maximum discounts of up to 50% in the summer or winter clearance sales, but these can take place only at fixed times of year.

"If all smaller businesses are wiped out, there will only be one, two...big chains and that is not a lot of competition and that is not a lot of variety," Hans-Frieder Schoenheit, spokesman and deputy managing director of the Association for the Fight Against Unfair Competition told the BBC's World Business Report.

Its 1,600 members include small companies and trade associations across Germany.