Retailer acknowledges deceptive “free” beer promotion, ACCC warns against misleading promotions

Posted by Editorial on 6th January 2009

South Australian wine retailer, Moving Juice Pty Ltd, has accepted that it is likely to have misled and deceived consumers by misrepresenting price savings in its sales promotions.Following an investigation by the Australian Competition and Consumer Commission, Moving Juice will take steps to correct representations made during February, March and April 2008 when it promoted two Coopers beer and Dog Leg wine specials in The Advertiser newspaper and in its sales catalogues.

Moving Juice said that consumers would receive a ‘free’ and ‘absolutely free’ slab of Coopers beer with the purchase of a dozen bottles of Dog Leg wine. However, the price of a dozen bottles of wine offered as part of the ‘specials’ was increased to incorporate part or most of the cost of the beer.

During April 2008, Moving Juice also advertised wine on its website using ‘Was $X Now $Y’ price comparisons. However, Moving Juice had neither sold, nor offered the wine for sale, at the higher ‘was’ prices since before November 2007.

The ACCC was concerned that by promoting the wine and beer specials and using the ‘Was $X Now $Y’ price comparisons Moving Juice was likely to have misled and deceived consumers in contravention of sections 52 and 53(e) of the Trade Practices Act 1974.

Moving Juice has consequently given the ACCC court-enforceable undertakings that it will:

* not use advertising or other promotions that contain false, misleading or deceptive representations with respect to the price of goods or services
* arrange to have published, at its own expense:
– corrective notices in The Advertiser, its sales catalogue and on its website, and
– an information notice in a wine industry magazine that will inform the industry of the ACCC action
* donate $2,000, being an estimate of the amount that Moving Juice profited from its conduct, to a charity nominated by Moving Juice, and
* implement a Trade Practices compliance program.

“Special offers of discounted or ‘free’ goods can be very effective in advertising, however the advertised price savings must be real and not illusory,” ACCC Chairman, Graeme Samuel advised. “Where businesses offer a product as ‘free’ with the purchase of another product at a specified price, they should ensure that the other product has by itself been offered at that specified price for a reasonable period immediately prior to the ‘free’ promotion.”

“Likewise, where businesses use a ‘was/now’ price comparison they should ensure that they have genuinely offered the product at the ‘was’ price for a reasonable period immediately before their sale promotion,” Mr Samuel said.