Misleading menus invite Infringement notices

Posted by Josette Dunn on 2nd July 2010

The Australian Competition and Consumer Commission is using its new powers to issue infringement notices to a number of restaurants and cafés which have menus that fail component pricing laws.Infringement notices carry penalties of $6,600 for corporations and $1,320 for individuals, and if the infringement notice penalty is not paid, the business may face court action.

The infringement notices are being issued against restaurants and cafés which have failed to provide the total price for menu items where weekend and holiday surcharges apply.

“The course of action taken by the ACCC follows more than a year of monitoring and informing the hospitality sector (including a number of warnings to specific businesses) about their obligations to comply with component pricing laws which were amended in May 2009,” ACCC chairman Graeme Samuel said.

“Restaurants and cafés are free to set surcharges, but they must provide consumers with a prominent single total price for goods and services, where they are able to be quantified at that time. This can be as simple as a separate menu or price column for the surcharge days.

“This means the practice of putting a note such as ’10 per cent surcharge applies on public holidays’ at the bottom of the menu but without the surcharge being included in a single price for the item is in breach of the law.”

Recently the ACCC inspected around 130 outlets across Australia and found a relatively small number of non-compliant menus.

“Many operators have heeded the ACCC’s warnings and changed their price representations,” Mr Samuel said. “Those which have not adjusted and continue to flout the law are exposed to the real risk of receiving an infringement notice from the ACCC.”

Mr Samuel said compliance with the law is important because many consumers make a decision about where they dine based on value for money.

“The component pricing laws not only help consumers make informed choices they also enable businesses to compete on price on equal grounds.”

Information about component pricing is available via: www.accc.gov.au/componentprice

Information about the ACCC powers to issue infringement, substantiation and public warning notices is available via: www.accc.gov.au/notices