The Federal Government is abandoning its crackdown on menu disclosure imposed under consumer protection law.
Assistant Treasurer David Bradbury released a draft exemption for menu surcharges yesterday so restaurants and cafes will be able to operate with only one menu which lists any surcharge for weekend or public holiday trading at the bottom of the menu.
This approach was common practice in the hospitality industry until laws introduced in 2009 required cafes and restaurants to provide customers with separate menus for weekends and public holidays which explicitly set out any higher prices.
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When the new legislation was introduced in 2009 the Australian Competition and Consumer Commission attracted criticism for taking action against small businesses who did not adhere to the pricing regulations.
At the time John Hart, chief executive of the Restaurant and Catering Association described the watchdog’s approach as “pretty vicious” after it instituted prosecutions against four small businesses for menu infringements.
“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,” Hart said at the time.
“Because they won’t pick a fight with them, they go after the smaller players.”
Hart told SmartCompany this morning he welcomes the change in approach from the Government which “has been a long time coming”.
“We have had a large number of public holidays during which our members have been uncertain how they would be treated if they imposed a surcharge so it’s nice to see some clarity,” Hart says.
He says the requirement to have different menus involved a duplication of effort and extra expenditure and just adding a line about a surcharge was much more straight forward.
“It is a fairly significant undertaking to reprint the menus, reprogram point of sales systems, redo your website every weekend and basically this will clarify all of that,” he says
Scott McDonald, the owner of Melbourne bar and restaurant Senoritas, told SmartCompany while the change was welcome it was not relevant for most cafes, restaurants and bars which did not change their prices on the weekends.
“I think across a lot of the hospitality industry a lot would not add that surcharge on, the fear is that a lot of businesses do not want to be the first in their area to put a surcharge on,” he says.
“A surcharge is not something most small and medium businesses can afford to do, we have to be competitive.”