The Commerce Commission is filing criminal charges against Woolworths New Zealand and two supermarkets under the Foodstuffs co-operative over allegations of inaccurate pricing and misleading specials.
According to the Commerce Commission, these allegations mean the supermarkets may have breached the Fair Trading Act.
Commerce Commission Deputy Chair Anne Callinan said the charges being filed against Woolworths NZ, Pak’nSave Silverdale and Pak’nSave Mill Street, Hamilton were to remind “all supermarket operators” the competition watchdog expected them to fix ongoing pricing accuracy issues, and also implement better processes to prevent issues in the future.
Pricing accuracy was a “consumer right” as well as an expectation of a competitive market, she said on Tuesday.
“Supermarkets have long been on notice about the importance of accurate and clear pricing and specials, and we’re not satisfied with the continuing issues we’re seeing across the industry,” she said.
“The major supermarkets are large, well-resourced businesses that should invest the time and effort to get pricing and promotions right.”
The Commerce Commission will be filing separate charges against Woolworths NZ, Pak’nSave Silverdale, and Pak’nSave Mill Street.
The Commission plans to put in place a mandatory disclosure standard under the Grocery Industry Competition Act requiring NZ’s major supermarkets to regularly disclose information about customer complaints – including around pricing and promotional issues.
Grocery Commissioner Pierre van Heerden said this will make it easier to identify trends and issues so they can be set right.
“The major supermarkets don’t have consistent processes for recording customer complaints – the lack of clarity and reporting means supermarkets can’t identify potential compliance issues within their businesses,” he said.
“This impacts consumers as their complaints may not be being dealt with effectively, which we would expect in a competitive market.”
Cooperating
A Foodstuffs spokesperson said Pak’nSave Silverdale and Pak’nSave Mill St were taking the criminal charges seriously and had “co-operated fully” with the Commerce Commission’s investigations.
“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.
Woolworths NZ said in a statement that it had also been cooperating with the Commerce Commission’s investigations “in relation to these matters for some time”.
Woolworths NZ’s Managing Director Spencer Sonn said Woolworths NZ was in the process of introducing electronic shelf labels in all of its stores – 130 of its 186 stores so far – to ensure that there were no paper-based shelf label errors.
“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. But sometimes errors occur,” he said.
Foodstuffs – made up of South Island and North Island cooperatives – and Woolworths NZ control the vast majority of the country’s grocery market.
NZ’s grocery sector has been under the Commerce Commission’s microscope this year as the competition watchdog wants the country’s intensely uncompetitive grocery market to become more competitive.
Van Heerden has been vocal about wanting a third supermarket competitor to set up shop here in order to help tackle the current supermarket duopoly of Foodstuffs and Woolworths NZ, but has said reducing the barriers to entry won’t happen overnight.
6 Comments
Some of you can also spend your money with their competition.
All the supermarkets are bad, the ones being charged are jus the ones that have been sufficiently caught. Stating people can spend money at the competition comes from a position of considerable privilege. Many people need to shop where the food is the cheapest and/or where they can access. Not everyone in this country has transport. There are plenty of small towns in NZ where there is only 1 supermarket in town & no local produce or butchery.
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