Tougher financial penalties could be on the way for supermarkets that rip off their customers, as Nicola Willis cracks down on misleading promotions and pricing errors.
The Economic Growth Minister said she had written to the country’s major supermarkets to remind them of her “basic expectation” that they take all steps to comply with the Fair Trading Act and ensure Kiwi shoppers aren’t 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.”
She was concerned to hear from the Commerce Commission and Consumer New Zealand that misleading promotional practices and common pricing errors were still occurring within the main 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.”
Two of Foodstuffs North Island’s Pak’nSave supermarkets had admitted multiple charges of breaching the Fair Trading Act this week, and the Commerce Commission had filed proceedings against Woolworths for misleading consumers about prices, Willis said.
They could face millions of dollars in penalties after admitting Fair Trading Act breaches, the Herald reported on Tuesday.
The Commerce Commission alleged Pak’nSave Silverdale in Auckland and Pak’nSave Mill St in Hamilton engaged in misleading specials and inaccurate pricing. Charges were also laid against Woolworths NZ.
At a hearing in Auckland District Court earlier this month, the Pak’nSave supermarkets admitted a total of 11 charges. They were remanded without plea on the remaining seven.
Each charge carries a maximum penalty of $600,000, meaning the companies could be fined millions of dollars for hoodwinking customers.
Willis said she could 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 shouldn’t 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.”
She had asked the big supermarket chains what they were doing to address the issues, warning that she was considering tougher penalties and potential changes to make sure the act was being “more readily enforced”, and noting the much higher financial deterrent in Australia.
“It is in their and New Zealand shoppers’ interests that they be clear about what they are doing to ensure shoppers are not misled … 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 A$50 million [NZ$5.39m].”
As well as fines in New Zealand being much lower than their equivalents in Australia, she had been told that prosecution could be quite hard under the act, Willis told Mike Hosking Breakfast this morning.
“So it’s only sensible that I look … do we need to lift the fines to be more like other countries? Do we need to make it easier to prosecute you for breaches of this?”
Asked if she was leveraging the breaches for political gain, Willis told Hosking it was her responsibility to hold supermarkets accountable.
“The supermarkets have said to me, again and again, and they’ve said publicly, that they do everything they can to be good providers of a supermarket service. So when I see that it doesn’t look like that, I think I should call it out.
“Our supermarkets are some of the most sophisticated, well-funded retailers that there are. And the fact that, in 2025, they are pleading guilty ... to not meeting their pricing obligations under the Fair Trading Act just isn’t good enough.”