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No Purchase Necessary!
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For more on marking an answer as the "Best Answer", please visit our FAQ.The "no purchase necessary" statement is required by law to differentiate the free prize draw competition from other forms of lottery which require licensing.
As iwdus says, it means you don't have to buy the product in order to enter a competition.
I think by law, manufacturers are not allowed to make you buy a product in order to enter a competition ( remember you used to have to collect tokens, or cut out the entry form from the packet ). After all, placing a competition on a packet is only a way of grabbing you attention and increasing sales.
Simply, lotteries, ie. the distribution of prizes purely by chance, cannot be lawfully provided if a charge is made and some degree of profit or private gain is achieved. So if the chance to win a prize depends on you giving someone money, it is strictly controlled by law. So a firm must offer the chance to win a prize without you having to make a payment or purchase.
Following a judgement in the House of Lords in 1980, to qualify as a lawful free draw a promotion would have to be totally free and open to any member of the public. If the draw involves the distribution of prizes by chance and a payment for that chance it may be an unlawful lottery.
There are no licensing or registration requirements or any restriction on who can run a prize competition or 'free draw'. The rules and conduct of the competition or 'free draw' are solely the responsibility of those running the promotion.