Another bedding retailer corrects price representations

Yarrabee Investments Pty Ltd has stopped false and misleading price advertisements on its bedding products after the Australian Competition and Consumer Commission raised concerns over the genuineness of their recommended retail price representations.

Yarrabee Investments sells furniture products, including bedding, through two retail stores in Victoria - Leather Lounges Direct and Dekabu Leather. It conducted a sales campaign from 3 April 2009 to at least 14 August 2009 advertising models of beds in the Herald Sun newspaper and on its websites at www.leatherloungesdirect.com.au and www.lounges.com.au.

The newspaper advertisement and website used price comparisons such as Rec.Ret $4989 Now Only $999. The advertisements included the words Sale Now On and Limited Stock.

The ACCC raised concerns that the recommended retail prices asserted by Yarrabee Investments were not genuine prices.

Yarrabee Investments has acknowledged that it had no foundation for the particular recommended retail prices represented and accordingly agreed the representations are likely to be in contravention of sections 52 and 53(e) of the Trade Practices Act 1974.

"This is the second bedding retailer in days highlighted by the ACCC as using false or inflated higher prices which it has used to compare with its sale prices at the time," ACCC chairman Graeme Samuel said today.

"Comparison pricing is a strong marketing tool used by consumers to not only judge the value of a represented saving but, as in the case of bedding, the higher price may also be taken by consumers to be indicative of the quality and features of a particular bed."

"Retailers referring to a product's recommended retail price can not merely make that price up themselves."

Yarrabee Investments has provided the ACCC with a court-enforceable undertaking that it will:

• not promote or offer any goods for sale using comparative price representations that refer to a recommended retail prices unless the stated RRP is a genuine RRP issued by an independent importer or manufacturer of the goods
• not promote or offer any goods for sale using comparative price representations (other than using RRPs) unless those goods have been offered for sale or sold at the higher price in reasonable quantities for a reasonable amount of time immediately prior to the commencement of the promotion or offer
• ensure that all future advertising and other forms of promotion by Yarrabee Investments complies with Part V of the Act, and
• implement a trade practices law compliance program.
  

A copy of the undertaking will be available on the ACCC's website.