Commerce Commission initiated against Woolworth proceedings alleging misleading prices
Nicola Willis, economic growth minister, has written to major supermarket chains regarding the “basic expectation” that they meet their statutory obligation on accurate pricing information under the Fair Trading Act 1986 and refrain from subjecting customers to misleading price claims.
“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,” Willis said in a news release from the government.
According to Willis, the Commerce Commission and Consumer New Zealand have stated that the country’s major supermarkets have been using misleading promotional practices and erroneous pricing practices.
Willis said these practices include charging customers higher prices at checkout than the product advertised, promoting specials failing to represent savings compared with the regular prices, and offering multibuys more expensive than the same products when individually purchased.
“This week it was reported that two PAKnSave supermarkets that are part of Foodstuffs North Island have pleaded guilty to multiple charges of breaching the Fair Trading Act,” Willis said in the news release.
Willis also shared that the Commerce Commission has initiated against Woolworth New Zealand Ltd proceedings alleging misleading prices.
The Commerce Commission claimed that Woolworths violated s 10 of the Fair Trading Act in the period from January 2022 to September 2024.
According to information from the government agency’s website, misleading pricing primarily occurred in the following situations: “(1) the advertised prices for grocery products did not match the price charged to consumers at the point-of-sale; and (2) grocery products were advertised at a special or discounted price which did not offer a genuine ‘special’.”
“I will not comment on ongoing court proceedings,” Willis said in the government’s news release. “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.”
Willis emphasised that consumers had no responsibility to notify supermarkets about pricing discrepancies and had the right to expect checkout prices to be identical to those stated in the aisle.
“I have asked the major supermarket chains for an update on the actions they are taking to address these issues,” Willis said in the news release. “It is in their and New Zealand shoppers’ interests that they be clear about what they are doing to ensure shoppers are not misled.”
In the government’s news release, Willis shared potential plans to introduce amendments aiming to improve the enforcement of the Fair Trading Act’s provisions and impose stricter penalties.
Willis noted that New Zealand’s current maximum penalty for Fair Trading Act breaches is a $600,000 fine, while Australian courts can set a penalty of $A50m at most.
