Branches of Pak'nSave and Woolworths will face charges for alleged inaccurate pricing and misleading specials. Photo / NZME
Branches of Pak'nSave and Woolworths will face charges for alleged inaccurate pricing and misleading specials. Photo / NZME
The Commerce Commission will file criminal charges against Woolworths NZ, Pak’nSave Silverdale, and Hamilton’s Pak’nSave Mill St for alleged inaccurate pricing and misleading specials.
And the Prime Minister today said this kind of crackdown should be welcomed.
“We want to make sure all of our sectors are more competitive, whether it’s banking or supermarkets,” Christopher Luxon said this morning.
“We’re expecting the Commerce Commission to do their job and it’s great to see they’ve taken action this morning.”
It’s understood at least some of the charges will be filed before Christmas.
”Shoppers should have confidence that the price they see will be the price they pay, and specials really are special,” Commerce Commission deputy chairwoman Anne Callinan said.
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.”
The commission said charges would be filed separately against Woolworths NZ, Pak’nSave Silverdale, and Pak’nSave Mill St.
The commission said the supermarkets in question may have breached the Fair Trading Act.
The Mill St store’s owners are Gladstone Retail Ltd, whose directors are Cher Walton and Hamish Walton.
The Silverdale store’s owner is Silverdale Food Warehouse Limited, whose director is Vinod Manu Bhaga.
The stores were chosen specifically because of the Foodstuffs (North Island) operating model, which is a co-operative, unlike Woolworths NZ, which is a single company.
Legal expert: Penalties may be in the millions
Tony Dellow, Buddle Findlay competition law lead consultant, said broadly speaking, cases of this type were often settled, and penalties well above $1 million were common.
“If the commission can make the case, the penalties will be substantial,” he told the Herald.
“You don’t blink when you see a million dollars,” he said of the penalties those studying this type of law had noticed.
“The vast majority of cases where the commission is successful, they’re usually settled. The commission and the defendants agree a penalty and put it to the judge,” he added.
“The judge makes his or her own decision but takes into the account the agreement that has been reached.”
The cases were always District Court matters, judge only, with no jury.
And in the cases announced today, most or all of the charges were likely to be filed at Auckland District Court.
It’s understood the commission will say the alleged offending happened over a period lasting more than a year, but the dates involved will vary from supermarket to supermarket.
Woolworths: ‘Sometimes errors occur’
Woolworths NZ said it was not clear how wide-ranging the charges would be but it was rolling out new technology to minimise pricing mistakes.
It said it would review the legal proceedings once filed.
“The timing and extent of the proposed proceedings are not clear,” the company said.
Woolworths said it had been co-operating with the commission in relation to the specials and pricing matters for some time.
Spencer Sonn, cutting the ribbon at right, says Woolworths is introducing electronic shelf labels in all stores to try to reduce pricing errors. Photo / File
“We know how important it is that our customers can trust that the prices we advertise, or have on our shelf labels, are what they pay at the checkout,” Woolworths NZ managing director Spencer Sonn said.
“But sometimes errors occur.
“To address this, Woolworths New Zealand has a long-standing and market-leading refund policy.”
He said if a customer was charged more for a product than the price Woolworths advertised it for, or was displayed on shelves, they get a refund and get to keep the product.
“More broadly, we are also in the process of introducing electronic shelf labels in all of our stores to ensure that there are no paper-based shelf label errors.
“To date, 130 of our 186 stores have electronic shelf labels in place.”
Foodstuffs: Inaccurate pricing unacceptable
Foodstuffs said this morning the Silverdale and Mill St Pak’nSave stores were taking the matter seriously and have co-operated fully with the commission.
“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,” a Foodstuffs spokesperson said.
“We’re working hard to ensure that the price customers see on shelves is always what they pay at checkout, and that all specials offer clear savings.
“If a customer believes they haven’t been charged the correct price, we encourage them to let our store teams know so we can refund them directly if they’ve been overcharged, or they can contact our customer service team.”
In September, the commission confirmed it would pursue a mandatory code to regulate the wholesale market for groceries, even as it launched an inquiry into whether further, more aggressive regulation was needed.
The purpose of those mandatory measures was to improve competition by letting other grocery retailers benefit from the buying power of supermarkets.
