"The Australian Competition and Consumer Commission has accepted court-enforceable undertakings from Forty Winks Franchising Pty Ltd over a recent television advertisement and instore representations about the likely effect of the Goods and Services Tax on bedding prices", ACCC Chairman, Professor Allan Fels, said today.
"The ACCC alleged that a recent Forty Winks television advertisement which stated Buy now before the GST bites had misled consumers into believing that the prices of bedding products would rise significantly following the introduction of the GST. However, as bedding products are currently subject to a 12% Wholesale Sales Tax, the ACCC believed that any price increases due to the GST would be relatively small".
"The ACCC also alleged that in-store representations by Forty Winks franchisees demonstrated a lack of understanding of the likely effect of the GST on bedding prices. The ACCC was concerned at the conflicting advice being given by employees at a number of franchisee stores.
"Forty Winks responded quickly to the ACCC's concerns by taking steps to withdraw the television advertisement immediately and to also provide Forty Winks franchisees with urgent training concerning the impact of the GST on the prices of bedding products.
"In addition, Forty Winks has now undertaken to: provide training materials to all Forty Winks franchisees on the impact of the GST on the prices of bedding products; provide a trade practices compliance program to all Forty Winks franchisees and employees at no cost in relation to Part V of the Act to the extent that these provisions may relate to GST representations; to run national corrective newspaper advertising; and establish a telephone hotline for customers who have concerns about statements made to them about the impact of the GST on the price of bedding products.
"Forty Winks has also undertaken to provide the ACCC with a report as to the operation of the telephone hotline, including the action taken by Forty Winks to address any consumer complaints.
"The ACCC acknowledges that Forty Winks responded both quickly and comprehensively to address the ACCC's concerns.
"In the GST environment it is crucial for all businesses to recognise that misleading representations by their organisation about the effect of the GST have to be remedied quickly and effectively so as to reduce the likelihood of widespread consumer detriment. The ACCC will continue to act swiftly to ensure that this outcome is achieved.
"This matter also highlights the need for all businesses that currently have a trade practices compliance program in place to urgently review and update their programs to take account of the new challenges brought about by the introduction of the GST".
