Former café operator ordered to pay $20,000 penalty

8 December 2010

Update: Following legislative amendments in 2013, restaurants, cafes and bistros that charge a surcharge on certain days do not need to provide a separate menu or price list or have a separate price column with the surcharge factored in. However, the menu must include the words “a surcharge of [percentage] applies on [the specified day or days]” and these words must be displayed at least as prominently as the most prominent price on the menu. If the menu does not have prices listed, these words must be displayed in a way that is conspicuous and visible to a reader. These measures apply to pricing for both food and beverages. See: Displaying prices

 

The Federal Court has ordered A.I. Constructions (ACT) Pty Ltd, the former owner of Babar Café and Bar (Woden) in the Australian Capital Territory, to pay a penalty of $20,000 for failing to provide all inclusive pricing on their menus.

The court declared that A.I. Constructions breached section 53C of the Trade Practices Act 1974 by setting out on its menus a 10 per cent surcharge for Sundays and public holidays without also specifying the single total price for menu items inclusive of the surcharge.

A.I. Constructions has since sold Babar Café and Bar (Woden) and it is important to note that the proceedings taken by the Australian Competition and Consumer Commission did not include the new owner of the business.

The orders made in relation to A.I. Constructions follows the ACCC obtaining orders by consent in the Federal Court on 2 November 2010 against two Sydney restaurants for similar conduct, requiring each trader to pay a penalty of $13,200.

"The penalties given to restaurants over the past two months for breaches of section 53C of the Act should act as a deterrent to any business contemplating hiding charges by not stating a single, all inclusive price for any good or service available for sale," ACCC chairman Graeme Samuel said today.

Earlier this year the ACCC surveyed a number of cafés and restaurants and found a number of menus which did not comply with section 53C. Infringement Notices were issued to those cafés that did not correct their menus after an ACCC warning. Proceedings were instituted against traders that did not pay the Infringement Notice penalty.

Release number: 
NR 265/10
ACCC Infocentre: 

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