Legal, Management

Café fined $20,000 for failing to provide all-inclusive pricing

StartupSmart /

The ACCC has urged hospitality businesses to ensure accurate pricing on Sundays and public holidays after a former café owner was fined $20,000 for failing to provide all-inclusive pricing on menus.

 

The Federal Court fined A.I. Constructions, the former owner of Babar Café and Bar in the ACT, for breaching section 53C of the Trade Practices Act 1974.

 

The owner was in breach of the act for placing 10% surcharge on orders during Sundays and public holidays without also specifying the single total price for menu items inclusive of the surcharge.

 

In November, two Sydney restaurants were fined for similar conduct, with each trader forced to pay a penalty of $13,200.

 

ACCC chairman Graeme Samuel says the penalties should serve as a warning for other businesses that fail to comply with the Act.

 

“The penalties… should act as a deterrent to any business contemplating hiding charges by not stating a single, all-inclusive price for any good or service available for sale,” Samuel says.

 

Earlier this year, the ACCC surveyed a number of cafes and restaurants, and found a number of menus did not comply with section 53C of the Act.

 

ACCC media director Lin Enright says the consumer watchdog surveyed around 300 venues nationwide and reviewed just under 200 complaints from the public.

 

Infringement notices were issued to cafés which failed to correct their menus after an ACCC warning, and proceedings were instituted against traders that did not pay the penalty issued to them.

 

Contravention of the Act carries a maximum penalty of $6,600 for a corporation and $1,320 for an individual.

 

Under recent amendments to the Trade Practices Act, if you make a representation about a part of the price a consumer will pay for a product or service, you must also specify – as a prominent single price – the total figure they will pay.

 

The ACCC states: “This applies whether representation is made in media advertisements for the purposes of comparison with your competitors or on an in-store price list like a menu used by consumers to help them decide between your different products.”

 

The ACCC says the new legislative requirements may mean that restaurants, cafes and hotels will have to change the way they make certain representations on their menus.

 

“For example, it will no longer be sufficient to write ‘X% surcharge on weekends’ at the bottom of a menu because X% is a quantifiable component of the price that consumers will pay for their food or beverage on the weekend,” it says.

 

“This means you may need to provide a separate menu for times a surcharge is applied or consider pricing structures that do not require the use of different price components on your menu.”

 

A list of frequently asked questions is available at www.accc.gov.au.

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