ACCC concerned by JB Hi-Fi comparative advertising

Australian Competition and Consumer Commission concerns about aspects of comparative advertising* by home entertainment retailer JB Hi-Fi Group Pty Ltd has led to the ACCC accepting court-enforceable undertakings.

ACCC Chairman, Mr Graeme Samuel, said the ACCC was concerned about representations in a catalogue distributed in February/March this year.

"The catalogue included 45 home entertainment products advertised at a discount represented as a saving of a nominated sum off each product's recommended retail price. 

"The products included televisions, DVD/VCR combos, DVD recorders, receivers, home theatre systems, speakers and video cameras.

"The ACCC felt consumers may have believed that JB Hi-Fi, or its relevant market competitors had, within a reasonable time before the catalogue's issue, sold the products in reasonable quantities at the recommended retail price. This may not in fact have been the case. If so, the ACCC was concerned that the catalogue may have contained false or misleading representations in breach of the consumer protection provisions of the Trade Practices Act 1974.
 
"JB Hi-Fi believes it was entitled to make the representations but has acknowledged the ACCC's concerns. In the undertaking, which was given on a without admissions basis, JB Hi-Fi has agreed that it:

• will not advertise any product with a discount off its recommended retail price unless the product was advertised and sold at that price in the same markets, in reasonable quantities for a reasonable period of time and within a reasonable period of the date of the advertising, and
• will establish and implement a trade practices law compliance program on the relevant consumer protection provisions of the Act.

"Price is a critical factor in influencing a consumer's decision to buy a product. Retailers using comparative advertising must ensure the savings claimed are real. This is a powerful marketing tool that must be used truthfully and accurately. Retailers should be careful not to drop their guard in the flurry of sales leading up to and following Christmas. The ACCC will certainly not drop its guard on the issue".

Mr Samuel acknowledged JB Hi-Fi's cooperation in resolving the matter.

Background

*There are a number of types of comparative or two price advertising. They include the use of the company's own or previous normal price, a competitor's price or a recommended retail price.