Two Pak’nSave supermarkets have been fined a combined $580,500 in the Auckland District Court after pleading guilty to inaccurate pricing in breach of the Fair Trading Act.
“The Commerce Commission has long put major supermarkets on notice about meeting their fundamental responsibility as businesses to ensure the ticket price on the shelf matches the price at the till,” Commerce Commission Deputy Chair Anne Callinan says.
“Despite this, Auckland’s Pak’nSave Silverdale and Pak’nSave Mill Street, in Hamilton, have now been criminally convicted for repeated pricing errors that misled their customers.
“The Commission will not hesitate to prosecute other supermarkets if we believe there is wrongdoing. Consumers are entitled to rely on accurate pricing, that is the bottom line. These are highly profitable stores who should be investing in pricing systems that ensure these errors that mislead consumers do not happen.”
Pak’nSave Silverdale was fined $234,000 for ten charges, and Pak’nSave Mill Street was fined $346,500 for eight charges.
The Commission is awaiting receipt of the full written judgment. This will be made available on the case register in due course.
“We’re satisfied with the penalty we secured under the current legislation, but this case highlights the necessity of the Government’s current review of the Fair Trading Act,” Ms Callinan says.
“Increasing the penalties and changing to a civil regime as proposed will give us the option to push for fines of up to $5 million for each breach, compared to our current maximum of $600,000.
“Fines in this range would have a much stronger deterrent effect and encourage genuine behaviour change. The proposed changes to the Fair Trading Act will support fairer outcomes for consumers and level the playing field for businesses following the rules."
The Commission’s case against Woolworths NZ for similar conduct is ongoing. Woolworths has pled not guilty.
Breaches in the grocery sector remain an area of focus for the Commission, with several ongoing matters involving the country’s major supermarkets.
In addition to ongoing investigations, the Commission has current proceedings against Foodstuffs North Island and Gilmours alleging cartel conduct.
Separately, in August, the Commission announced civil proceedings against Foodstuffs South Island for allegedly implementing and enforcing a restriction on independently owned Pak’nSaves discounting selected products.
“We will continue to act within our current remit to hold the major supermarkets to account on behalf of Kiwis,” Ms Callinan says.