Supermarkets have statutory obligations under the Fair Trading Act to ensure that pricing information is accurate and does not mislead consumers.
Economic Growth Minister Nicola Willis has written to the major supermarkets to reiterate the basic expectation that they take all necessary steps to comply with the Fair Trading Act and ensure Kiwi shoppers are not subjected to misleading price claims.
“I am disappointed that I have to spell out to some of New Zealand’s biggest and most sophisticated retail operators - Foodstuffs North Island, Foodstuffs South Island, and Woolworths - that they should have in place processes to prevent inaccurate pricing, institute and publicise refund policies, and train staff to ensure that when errors are reported, fixes occur system-wide.”
Willis said that compliance with the law should be a basic expectation, and she was concerned to hear from the Commerce Commission and Consumer New Zealand that misleading promotional practices and common pricing errors are still occurring within New Zealand’s major supermarket chains.
These include customers being charged more at the checkout than the advertised price, specials being advertised that don’t represent a saving on the normal price, and multibuys that are more expensive than if the products were purchased individually.
This week, it was reported that two PAK'nSAVE supermarkets, part of Foodstuffs North Island, have pleaded guilty to multiple charges of breaching the Fair Trading Act. The Commerce Commission has also filed proceedings against Woolworths for misleading consumers about prices.
“I will not comment on ongoing court proceedings. However, it is clear that as participants in a sector that generates revenue of NZD 27 billion a year, the major supermarkets have the resources to treat their customers fairly,” said Willis.
“It should not be the customers’ responsibility to alert stores to pricing discrepancies. Kiwi shoppers have the right to expect that the price they pay at the checkout is the same as the price they see in the aisle.”
She has requested an update from the major supermarket chains on the actions they are taking to address these issues. It is in the interests of both New Zealand and Australian shoppers that they be clear about what they are doing to ensure shoppers are not misled.
“I am considering introducing tougher penalties and potential changes to ensure the provisions of the Fair Trading Act are more readily enforced. I note that the maximum penalty for a breach of the Fair Trading Act in New Zealand is a fine of NZD 600,000, whereas in Australia, the courts can impose a penalty of up to AUD 50 million.”
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