Court hands down first fines for breach­es of sin­gle pric­ing law

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 caf 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.

For fur­ther infor­ma­tion or advice in rela­tion to these issues please con­tact our Com­mer­cial and IP & Tech­nol­o­gy Team.