Promotional pricing practices have long been a concern of the Office of Fair Trading (OFT) so, in 2012, it followed up its 2010 Advertising of Prices report with further market research into food pricing and promotional practices.
It intended to provide some clarity on what was and wasn’t acceptable, or considered to be misleading for the consumer, with regards to promotional pricing – but have the new guidelines actually changed anything?
The OFT has now asked supermarkets to agree to voluntary principles for promotional advertising, covering reference pricing, ie ‘was-now’ pricing, and pre-printed value claims on-pack. It is understood that the OFT will take a dim view of any signatories who fail to comply with the guidance.
These new principles introduce a number of subtle changes to the existing guidelines. For example, it would now be deemed misleading for a product to carry a message stating it is the ‘best value’ when it would be possible to purchase a smaller pack for a lower effective unit price.
The latest guidelines also cover ‘was-now’ pricing practices, and impact especially on products that are seasonally priced, such as soft fruit. These products are sold year-round but, due to increased supply, have prices that are dramatically reduced during the peak season. The OFT believes that comparing peak season costs with off season ones is misleading, but why is this? If the product was for sale and sold at the higher price, surely it is a genuine selling price and the consumer is entitled to be informed that the price is now lower?
The OFT appears to be subtly shifting what is expected of reference pricing in a number of other ways, stating that:
The new principles are not law, but are there to provide some clarity on specific pricing practices where the overarching consumer protection legislation does not deal with the detail. Perhaps further clarity and consistency will occur when the OFT reviews the Pricing Practices Guide later this year. Ultimately, however, they do not change the fact that if a promotion is misleading – either by act or omission – it will be unlawful.
The definition of a consumer is one that is ‘reasonably well informed’, ‘reasonably observant’ and ‘circumspect’. If a consumer is happy to pay a price and decide whether or not something is a good deal, can a retailer really be accused of misleading them? After all, every transaction is dependent on the consumer’s decision to buy. With this said, it is questionable as to whether these latest guidelines will impact on retailers and suppliers in any real way.
© FoodBev Media Ltd 2024