Grocery Commissioner worried about power imbalance between suppliers and supermarkets. Video / Herald NOW
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 Stin 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, but were remanded without plea on the remaining seven.
“The Commerce Commission filed charges against Pak’nSave Silverdale and Pak’nSave Mill St in the Auckland District Court for alleged inaccurate pricing and misleading specials that may have breached the Fair Trading Act.
“As the case is before the court, the Commission is unable to comment further. We can however confirm that Pak’nSave Silverdale and Pak’nSave Mill St have both entered guilty pleas on some charges and were remanded without a plea until a further appearance on a number of other charges.”
Consumer NZ chief executive Jon Duffy said the prosecution and looming penalties were a “wake-up call” for the industry.
The charges followed a Consumer NZ campaign in which hundreds of Kiwi shoppers sent in examples of dodgy supermarket pricing.
Consumer NZ then complained to the commission and Duffy said he was encouraged to see the issue getting real traction.
“The Fair Trading Act exists to protect shoppers from misleading and deceptive pricing and promotional practices, and it’s essential that companies, especially major brands like Pak’nSave, are held to account.
“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.”
Duffy said 66% of shoppers said they regularly noticed pricing errors and supermarkets were now on notice.
The supermarkets could face millions of dollars in penalties after pleading guilty to breaching the Fair Trading Act.
“Misleading promotions and systemic pricing are unacceptable. We will continue to monitor the sector closely ... and advocate for greater transparency and fairness in supermarket pricing.”
In December the Herald reported the Mill St store’s owner was Gladstone Retail Ltd, whose directors are Cher Walton and Hamish Walton, while the Silverdale store’s owner was Silverdale Food Warehouse Ltd, whose director was Vinod Manu Bhaga.
Foodstuffs spokeswoman Esther Gordon declined to comment yesterday, saying doing so would be inappropriate while the matter was before the court.
A Foodstuffs North Island spokesperson earlier said the stores took the matter seriously and had co-operated fully with the Commerce Commission investigation.
“Foodstuffs North Island’s stores process millions of transactions a day, and while errors are relatively rare, we agree that any inaccurate pricing is unacceptable,” the spokesperson said.
“We work hard to ensure that the price customers see on (the) shelf is always what they pay at the checkout, and that all specials offer clear savings.”
Customers who believed they had been incorrectly charged should alert supermarket staff to arrange a refund.
Announcing the charges last year, Commerce Commission deputy chairwoman Anne Callinan said shoppers should have confidence they were paying the advertised prices, and that “specials really are special”.
She said supermarkets had been on notice about accurate and clear pricing and specials, but the commission was not satisfied progress had been made.
”Pricing accuracy is a consumer right and an expectation of a competitive market. The major supermarkets are large, well-resourced businesses that should invest the time and effort to get pricing and promotions right.
“The charges we’re filing against major supermarket brands are to remind all supermarket operators that we expect them to fix ongoing pricing accuracy issues and implement better processes to prevent issues like these in the future.”
Last year, Foodstuffs was fined $3.25 million for imposing anti-competitive land covenants to try to block competition in the lower North Island.
The fine for Foodstuffs North Island was the biggest imposed for anti-competitive land covenants.
Lane Nichols is a senior journalist and Auckland desk editor for the NZ Herald with more than 20 years’ experience in the industry.
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