ACCC launches component pricing crackdown

Start-up businesses have been warned to be aware of component pricing laws after four cafes and restaurants were charged by the Australian Competition and Consumer Commission.

The ACCC has instigated proceedings against the businesses for allegedly failing to include Sunday and public holiday surcharges in their menu prices.

The companies are the Barbar Café and Bar in the ACT, Syndey outlets Georges Bar and Grill and Steersons Steakhouse and Signature Brasserie in Brighton Le Sands.

The operators have been charged under laws that require businesses that show a part of the price payable for a product or service to display the single total price as well.

Proceedings were brought against the cafes and restaurants for having menus that the ACCC claims did not comply with the component pricing laws.

The ACC has said that it has produced specific guidance for restaurants, hotels and cafes on their obligations, but the restaurant industry has reacted furiously to the charges, claiming that smaller operators were being singled out.

John Hart, CEO of the Restaurant and Catering Association, says: “The compliance activity being undertaken over the past three to four months has been pretty vicious.”

“The reality is we detest the way the ACCC goes about these things because they do so through press releases and by naming companies. I understand the reason they do it, because they just don’t have enough officers to round people up, but we still think it’s absurd and totally unfair.”

“Our board is absolutely furious with the way this has been dealt with, there is so much anticompetitive behaviour and yet so many bigger players get away totally unscathed. Because they won’t pick a fight with them, they go after the smaller players.”

The component pricing laws that start-ups have to be aware of fall under the 1974 Trade Practices Act, which prohibits businesses from misleading consumers by only showing the part of a product or service’s price.

The regulations were updated on 25 May 2009. The amendments mean that if a business shows a particular part of a price in an advertisement, it must also show the entire sale price at the same time.

The total price is required to feature “at least as prominently” as the leading price component, according to the ACCC. The aim is that consumers are easily able to determine the accurate price of their purchase.

The rules particularly impact upon the travel, retail and hospitality industries.