On 4 November 2010, the Federal Court ordered two restaurants to pay penalties of $13,200 each for breaching the law requiring a single, all-inclusive price to be clearly stated to consumers. This follows the introduction earlier this year of new laws under the Trade Practices Act (which from next year will be known as the Competition and Consumer Act 2010), requiring all businesses to state a single price for any goods or services that are offered.
The orders were made by consent after the Australian Competition and Consumer Commission (ACCC) took action against Helmos Enterprises (NSW) Pty Ltd, trading as Georges Bar and Grill, and Gourmet Goody's Family Restaurant Pty Ltd, trading as Steersons Steakhouse.
The ACCC alleged that the menus failed to tell customers the full price they would pay on a Sunday or a public holiday, relying instead on a qualification indicating the application of a percentage surcharge. To know the true charge on those days, customers had to add the surcharge to the price listed on the menu. The menus therefore failed to state the single price of each item accurately, as required by the new laws.
This is the first time that the court has ordered civil penalties under the new laws. It follows the ACCC's first use of Infringement Notices under new provisions of the law earlier this year. For further information about the new laws, please see our earlier article New pricing in advertising laws.
Earlier this year the ACCC surveyed a number of cafés and restaurants and found that a number of menus did not comply with this section of the law. Infringement Notices were issued to those establishments that did not correct their menus after an ACCC warning. Proceedings were instituted against traders that did not pay the Infringement Notice penalty of $6,600
The ACCC will continue to be very active in this area and all businesses need to be aware of their obligations in relation to pricing in order to avoid scrutiny from the regulator, which will continue to look for infringements that it can use as an example to the market as a whole.
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