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Supermarket operator Progressive Enterprises is appealing against a conviction and fine for selling cereal that promoted an already closed competition.
Progressive was fined $17,000 in May for continuing to sell Signature Range cereals months after a competition inside the packs to win five trips to Australia had ended.
But the company told the High Court at Auckland yesterday that it never intended to deny customers the opportunity to win, and the continuing sales were a "reasonable mistake".
The Fair Trading Act says it is an offence to offer gifts or prizes with the intention of not providing them.
The Commerce Commission acknowledged at the time that the Foodtown, Countdown and Woolworths operator's offending was in part caused by a series of errors.
But it said that despite receiving complaints from customers directly, Progressive's own records showed it continued to display the cereals on its shelves in over 70 stores for three months after the competition closed.
The commission said it was "disappointing" that one of New Zealand's biggest businesses did not have systems to adequately deal with the situation.
The competition, to "win one of five uplifting trips to the Hunter Valley in Australia", ended on August 31, 2006. The entry form inside the packs gave the closing date, but the promotion on the outside of the packet did not.
The commission's investigation found that the cereal was still being sold in at least 12 stores in Christchurch, Palmerston North and Auckland at various times until early December 2006.
Progressive's counsel, David Goddard, QC, told the High Court yesterday that by the beginning of the period dealt with in the Commerce Commission charges, the company had printed and distributed stickers to be put over the old promotion.
It had also paid suppliers to destroy packaging on hand carrying the outdated information.
It found out only after talking to the commission that one supplier had continued to use the packaging.
