How to Run Trade Promotions Legally in Australia

How to Run Trade Promotions Legally in Australia

From major supermarkets to local retailers, running a competition or prize draw can be a winning marketing move. If you’ve ever browsed Coles or Woolworths, you’ve probably seen colourful stickers announcing chances to “win a year’s worth of groceries” or “find the golden ticket inside.”

As business owners increasingly Google “Do I need a permit for a trade promotion in NSW?” or “What rules apply to competitions in Australia?”.

Trade promotions can be your secret weapon for customer engagement, sales spikes, and new leads. But before you start handing out prizes, there’s one question to ask which is are you complaint with the ever-changing laws?

Why Are Legal Rules for Trade Promotions So Complex?

The heart of the issue perhaps lies in the question of jurisdiction.

There’s no single Australian law covering all trade promotions. Instead, every state and territory—like New South Wales, Victoria, and Queensland—has its own set of regulations.

Even digital “games of skill” and “games of chance” are policed differently, sparking confusion for businesses eager to launch nationwide competitions.​

On top of that, new laws are often introduced with little warning.

Consumer protection agencies regularly investigate promotions, making headlines when popular supermarket campaigns run afoul of red tape. Businesses must stay nimble and informed. Otherwise, what was planned as a brand-building event could quickly turn into a compliance headache—or worse, land you with a hefty fine.

Key Questions to Ask

Launching a trade promotion is not as simple as printing flyers or sharing a post on Instagram. Here are some practical questions you should consider:

Is your promotion a “game of skill” (judged entries) or “game of chance” (random draw)?

• Does your promotion require a permit in some or all states?
• Are your terms and conditions watertight—and do they clearly spell out how winners are chosen?
• How are you collecting, storing, and using personal information from entrants? (Privacy law matters!)
• If you’re offering big-ticket prizes, could your promotion raise concerns under gambling or consumer law?
• What strategies exist to resolve disputes if a participant claims the draw wasn’t random?
• Are you promoting your competition on social media—including influencers and hashtags?

Each platform has its own rules and disclosure expectations.

Missing any of these could see your business facing not just regulatory action, but negative publicity and loss of customer trust.

Are there any prize limitations?

All prizes offered in trade promotions must be legal and comply with Australian standards.

This means you cannot offer banned items such as firearms, tobacco, or cosmetic surgery as prizes, and there are strict limits for alcohol.

The prize must be described accurately, with its actual market value clearly stated, as this affects whether a permit is needed in each state or territory. Above all, prizes should be safe and suitable for the intended audience, and the promotion rules must be fair and not misleading.

We are often asked to check that products offered as prizes in trade promotions comply with all relevant Australian laws and standards.

This step can be easily overlooked, but it is crucial.

For example, sunglasses must meet the mandatory safety requirements set by Australian/New Zealand Standard AS/NZS 1067.1:2016, which covers impact resistance and UV protection. Similarly, bicycles must comply with Australian Standard AS 1927:1998 to ensure they are safe for use and properly labelled. Other products like children’s toys, cosmetics, or electrical items may have their own specific mandatory standards or bans. It’s important to confirm compliance before the promotion—otherwise, the business could face recalls, penalties, or even legal action for supplying unsafe or banned products.

Not Just for the Big Brands

While companies like Coca-Cola, Nestlé, Arnott’s, Kellogg’s, and Unilever are famous for their supermarket promotions, the legal framework applies just as strongly to small and medium businesses hoping for big impact.

Whether it’s a giveaway to celebrate your store’s anniversary, a social media contest linked to a new product, or a customer loyalty raffle, you need to get the compliance side right.

Checklist

Before considering all the fine details, it’s worth pausing for a moment to think about why checklists matter when running a trade promotion.

On the surface, competitions and giveaways seem simple—a fun way to get noticed, build brand loyalty, and keep your customers engaged. But every promotion, whether it’s based on skill or chance, comes with its own set of legal hoops to jump through.

A well-structured checklist isn’t just paperwork; it’s your safety net.

By taking the time up front to confirm legal requirements, privacy issues, and fair winner selection, you can focus on growing your business and know your promotion is both exciting and compliant. With that in mind, here’s what you should be checking before you launch:

1. Confirm if your promotion is skill-based or chance-based
2. Check permit requirements for every state or territory where it will run
3. Draft detailed terms and conditions, reviewed by a legal professional
4. Develop a privacy policy for collecting entrant data
5. Clarify winner selection and notification processes
6. Keep accurate records for auditing purposes
7. Review advertising and promotions laws for all platforms used.

Compliance isn’t just about avoiding fines—it’s about protecting your brand and building trust.

As Richard Branson says, ‘Respect is how to treat everyone, not just those you want to impress.’

Following the rules in trade promotions shows respect for your customers and secures your company’s reputation for the long term.

Frequently Asked Questions
1. Do I always need a permit for a trade promotion in Australia?
Not always—it depends on the state, the type of promotion, and the value of prizes.

2. What’s the difference between a game of skill and a game of chance?
A game of skill requires entrants to do something judged on merit (e.g., submit a slogan). A game of chance involves random selection, like a lucky draw.

3. Can I collect and use entry information for marketing?
Possibly yes, if you disclose this in your terms and follow the Australian Privacy Principles.

4. What if I want to run a nationwide competition?
You’ll need to comply with each state’s different rules—some require multiple permits.

5. Are there special rules for online and social media competitions?
Absolutely—ensure your promotion complies both with Australian law and social media platform terms.

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Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.