Pak‘nSave supermarkets admit breaching Fair Trading Act with misleading prices, face millions in fines
Two major supermarket operators could face millions of dollars in penalties after admitting Fair Trading Act breaches by misleading shoppers.
In March, the Commerce Commission filed criminal charges against two North Island Pak'nSave supermarkets over potential fair trading offences.
The commission alleged Pak'nSave Silverdale in Auckland and Pak'nSave Mill St
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Minister for Economic Growth Economic Growth Minister Nicola Willis has written to the major supermarkets to restate the basic expectation that they take all steps needed to comply with the Fair Trading Act and ensure Kiwi shoppers are not subjected to misleading price claims. 'Supermarkets have statutory obligations under the Fair Trading Act to ensure that pricing information is accurate and does not mislead consumers. '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. Compliance with the law should be a basic expectation. 'I am 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 are individually purchased. 'This week it was reported that two PAKnSave supermarkets that are part of Foodstuffs North Island have pleaded guilty to multiple charges of breaching the Fair Trading Act. The Commerce Commision 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 $27 billion a year, the major supermarkets have the resources to treat their customers fairly. 'It should not be 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. 'I have asked the major supermarket chains for an update on the actions they are taking to address these issues. It is in their and New Zealand shoppers' interests 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 $600,000 whereas in Australia the courts can impose a penalty of up to $A50 million.'
1News
2 days ago
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Two Pak'nSave supermarkets plead guilty to Fair Trading Act breaches
Two Pak'nSave supermarkets have pleaded guilty to breaching the Fair Trading Act. The Commerce Commission said it filed charges against Pak'nSave Silverdale and Pak'nSave Mill St in the Auckland District Court. It said the stores used inaccurate pricing and misleading specials that might have breached the Fair Trading Act. Pak'nSave Silverdale entered guilty pleas on seven charges and was remanded without plea on three further charges. Pak'nSave Mill St entered guilty pleas on four charges and was remanded without plea on four further charges. ADVERTISEMENT The maximum penalty for breaches of the Fair Trading Act is $600,000 for a business, per offence. The Commerce Commission said it could not comment further while the case was before the courts. Consumer NZ chief executive Jon Duffy said he was pleased to see the issue getting traction. "Consumers deserve clear, honest information when making purchasing decisions. Misleading pricing not only erodes trust, but it also unfairly disadvantages shoppers amidst an ongoing cost of living crisis," he said. "We urge all supermarkets and retailers to take this as a wake-up call: Misleading promotions and systemic pricing are unacceptable." Duffy said Consumer NZ would continue to monitor the supermarket sector closely. He said work was being done to "sort out supermarkets" as two-thirds of shoppers reported regularly noticing pricing errors. "We understand that more investigations are underway, and we really hope to see meaningful action as a result of our complaint and the commission's work." ADVERTISEMENT
