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ACCC searches for new targets

Published: 13 Oct 2010

By Joe Lederman
FoodLegal Lawyers and Consultants

© Lawmedia Pty Ltd, October 2010

The Australian Competition and Consumer Commission (ACCC) is selecting new targets for enforcement action. FoodLegal reports on some of the risks and opportunities in marketing regulatory compliance.

As the Trade Practices Act has been amended to grant additional enforcement powers to the ACCC, it is becoming more important for food business personnel to be aware of their Trade Practices Act obligations. Especially in the way the food is marketed and also in relation to the pricing by food businesses for their products and services.

Component pricing crackdown

A good example of one type of misleading and deceptive conduct that has its own provision in the Trade Practices Act: Section 53C addresses the offence of two-price advertising. FoodLegal Bulletin has already explored the potential pitfalls that food businesses can face as a result of the new Section 53C being introduced (see our article “New restrictions on price marketing strategies” in the June 2009 issue of FoodLegal Bulletin).

However, in June 2010, the ACCC announced that it was issuing infringement notices (under its new enforcement laws – similar to parking tickets except typically a $6,600 fine for each infringement) to a number of cafes and restaurants for breach of Section 53C. The fine could even exceed the $6,600 because it is easy for the same event to trigger more than one single infringement.

The majority of the breaches were the result of surcharges in menus – resulting in menu pricing not reflecting the total price that consumers could have to pay in certain circumstances (particularly weekend and holiday surcharges).

The ACCC said it had inspected over 130 outlets and will be continuing its monitoring of the hospitality sector.

Other problem

By January 2011, the ACCC will be able to enforce the Australian Consumer Law provisions against individuals, not just companies, as the State and Territories have agreed to cede some of their own jurisdictional powers to the Commonwealth to ensure nationally-consistent enforcement. This move, coupled with infringement and substantiation notices, ought to be enough to put any food business, large or small, on notice of additional business risk as a consequence of a more stringent approach by the ACCC.