The Australian Competition and Consumer Commission has finalised its investigations of the Franklins' over-charging on Goods and Services tax-free goods during the GST's introduction.
"As a result of the intervention Franklins has agreed to a number of remedies and the ACCC will take no further action on this matter," ACCC Chairman, Professor Allan Fels, said today.
"The remedies included:
- a three week 11 per cent discount off the normal retail prices of all the relevant products from last Wednesday;
- full refunds for consumers of the over-charging;
- full-page advertisements in newspapers in NSW, Queensland, Victoria and South Australia which apologised for the over-charging and detailed the discount period;
- additional half-page advertisements in the papers on the two following Mondays;
- in-store notices in all of its stores Australia-wide advising of the over-charging; and
- has now put in put in place a substantial program to ensure that the problem does not recur.
"Franklins has undertaken to develop a policy for handling any future GST problems which includes:
- notification to the ACCC of errors/potential errors;
- correction of pricing where an error has occurred;
- customer recompense; and
- notification to customers of the policy.
"The ACCC is of the view that Franklins, as one of the 'big three' supermarket chains, had the staff and resources to ensure its pricing systems worked. The ACCC acted to overcome a significant consumer detriment after receiving more than 100 complaints. Franklins was aware of the over-charging, had itself received consumer complaints and, until ACCC intervention, did little to redress the consumer detriment.
"The ACCC believes that where there is over-charging there is a significant consumer issue which business must resolve. There must be quick corrective action, compensation for consumers, and systems put in place to prevent repeated over-charging. In the Franklins case substantial steps have been taken including compensation for consumers in the form of the 11 per cent discount.
"It has been estimated that correcting the over-charging has cost the company a much greater amount that it received from consumers by over-charging.
"The ACCC is continuing to examine other complaints made about grocery stores and is reviewing these complaints on a case-by-case basis according to its normal law enforcement criteria".
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