Restaurant menus misled consumers

4 November 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 two restaurants to pay a penalty of $13,200 each for breaching the all-inclusive pricing law on their menus. The orders were made by consent after the Australian Competition and Consumer Commission took action against Helmos Enterprises (NSW) Pty Ltd, trading as Georges Bar and Grill, and Gourmet Goody's Family Restaurant Pty Ltd, trading as Steersons Steakhouse.

The ACCC alleged that the menus failed to tell customers the full price they would pay on a Sunday or a public holiday, relying instead on a qualification indicating the application of a percentage surcharge. To know the true charge, customers would have to add the surcharge on such days.

"This is the first time that the court has ordered civil penalties, which began operation in April this year, and follows the ACCC's first use of Infringement Notices under new provisions of the Australian Consumer Law," ACCC chairman Graeme Samuel said. "The use of these new powers has been instrumental in ensuring that restaurants and cafes are aware of their obligations under the Act, and spreading the word that, by failing to comply, they will be running the gauntlet of the ACCC's patience."

The court declared, by consent, that Georges Bar and Grill, and Steersons Steakhouse, breached section 53C of the Trade Practices Act 1974. This section requires businesses that show a part of the price payable for a product or service, must also provide the single total price of that product or service.

Earlier this year the ACCC surveyed a number of cafés and restaurants and found a number of menus 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 of $6,600.

"The ACCC takes its new powers very seriously. It is ready and able to use them to great effect, when necessary. Most importantly, such civil penalties, allow the ACCC to seek proportionate responses to breaches and enables it to more effectively promote compliance with the law."

Release number: 
NR 243/10
ACCC Infocentre: 

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Media enquiries: 
Ms Lin Enright - (02) 6243 1108
Mr Graeme Samuel - (03) 9290 1812