Mitre 10 has pleaded guilty to advertising garden equipment as being on special when it was selling at normal retail prices in some Auckland stores.
The hardware giant appeared in the Auckland District Court yesterday to answer three charges of breaching the Fair Trading Act in the Summer Special promotional catalogue
which was distributed to one million New Zealand households in January last year.
The catalogue contained 88 coupons which customers could redeem for discounted prices on various items.
Among the advertised specials were coupons for Morrison classic mowers at $449, Reflex line trimmers at $79, and Bosch hedge trimmers at $139.
But Commerce Commission prosecutor Peter Woolley told Judge Cecilie Rushton yesterday that 14 of Auckland's 22 Mitre 10 stores regularly sold those products at the so-called "special" price, rendering the coupons worthless.
One customer complained to the commission after being told at the Glenfield store that she did not need the coupon to buy a Bosch hedge trimmer for $139.
Mr Woolley said an investigation found catalogue claims for the three items were false in that there were no savings.
Mitre 10 head office admitted responsibility for nationwide advertising but said it often had no idea what stores normally charged for individual items.
Defence counsel Raynor Asher, QC, said a systems failure was to blame.
Mitre 10 head office relied on franchisees to keep their normal prices above sale prices.
The problem had arisen because of cut-throat competition in Auckland which had forced several stores to slash their prices on a regular basis.
Mitre 10 had not intended to deliberately mislead customers and, while careless, their action had not been reckless.
Mr Asher said customers and rival traders were not disadvantaged. The products were sold at low prices and customers would have bought them wherever they were cheapest.
This was the first time Mitre 10 had been prosecuted and the company had ceased all such national promotions as a result, he said.
Judge Rushton will sentence Mitre 10 this afternoon.
