What Are the Legal Risks of Running a Trade Promotion in Australia?

Competitions and Trade Promotions, Business Planning

When planning a trade promotion, it’s crucial to structure it in a way that complies with the law. This involves understanding the legal requirements, obtaining necessary permits, and ensuring that your promotion is transparent and fair. In this guide, we’ll explore how to structure your trade promotion to comply with the law and avoid common pitfalls.

What Laws Govern Trade Promotions in Australia?

Trade promotions—such as competitions, giveaways, and prize draws — are regulated individually by legislation in each state and territory of Australia. These laws set out specific rules on disclosure competition structure, entry methods, winner notification, permits and prize distribution to ensure transparency and fairness.

What Are the Most Common Compliance Errors Businesses Make?

Many businesses unintentionally breach trade promotion laws by overlooking key requirements. Common errors include selling the entries, selling one off “tickets”, failing to obtain necessary permits, providing unclear or misleading terms and conditions, and inadequate prize fulfilment procedures. For example, not lodging your promotion with the relevant regulator or neglecting to clearly communicate entry conditions can expose your business to legal action.

Another very common mistake for business offering membership options is not having enough of a benefit within the memberships to justify the membership fee – thus triggering a fine for selling the entries.

What Are the Consequences of Non-Compliance?

Ignoring trade promotion laws can lead to severe repercussions. Penalties range from hefty fines and enforceable undertakings to reputational damage and costly legal disputes. The state regulators actively monitor promotions and have taken action against a number of operators.

Beyond financial penalties, non-compliance risks undermining customer trust and brand integrity.

How Can You Structure Your Trade Promotion to Comply With the Law?
  • Comply with the law: Ensuring your trade promotion complies with Australian laws requires careful planning. Start by understanding the legal requirements specific to your type of promotion and location.
  • Have correct documentation: Draft clear, concise terms and conditions that cover all legal bases.
  • Obtain permits: If permits are required, lodge applications early and keep thorough records.
  • Engage an expert: Engaging experts to review your promotion setup helps mitigate risks and streamline compliance, so your campaign runs smoothly and lawfully.

Trade promotions offer exciting opportunities but carry hidden legal complexities. Speak to our trade promotion experts at Gladwin Legal to ensure your campaign runs without a hitch—protecting your business while maximising success.

Contact us today for a consultation at  or 1300 033 934.