What happened?
Birmingham Trading Standards prosecuted Tesco for using misleading price practices. Tesco were fined £300,000.
Strawberries had been on sale for 1 week for £3.99 then another 1 week for £2.99 and then 14 weeks for £1.99 and labelled as ‘half price’ – obviously they were not really half price as a ‘full price’ had never been established.
£1.99 was the full price because that was the price that had been sold at the longest amount of time.
If they had merely priced the product at £1.99 without saying ‘half price’ they would have been fine – it was only saying ‘half price’ that made it misleading (because it was a false statement) – but Tesco know that using terms like ‘half price’ and using big promotional posters will increase sales.
Reports say that sales of strawberries quadrupled over the period of the promotion and that Tesco made a profit of £2,300,000 – so they have still ended up financially better off. On the plus side if Tesco get prosecuted for the same thing again then the fine should hopefully exceed any profit that is made during the period of any misleading promotion.
By the way, the prosecution was taken under legislation called the Consumer Protection from Unfair Trading Regulations 2008 – I note that most new articles have failed to refer to the proper title of the legislation.
2 year case
I noted that the case started in 2011 (not sure which month) so it has taken quite a long time to conclude – after all this is a very simple case in the grand scheme of things. Then I saw this paragraph:
“The guilty plea by Tesco followed a preliminary hearing this year when the supermarket argued the council lacked the jurisdiction to proceed outside Birmingham on the case. The court threw out that claim.” http://www.theguardian.com/business/2013/aug/19/tesco-strawberry-deal-fine-birmingham
Unsurprisingly, rather than admit they were wrong Tesco resorted to trying to use a legal technicality to get off – but lost. Of course after they were fined Tesco did apologise – I wonder if they would have apologised if they had gotten o – or would Birmingham have been criticised for wasting taxpayer money?
Legal costs
Also of interest is that Birmingham’s legal bill came to £65,000 which they would have ended up having to foot if they had lost on the technicality mentioned above.
BBC article:
http://www.bbc.co.uk/news/uk-england-birmingham-23755528
Telegraph article:
Guardian article:
http://www.theguardian.com/business/2013/aug/19/tesco-strawberry-deal-fine-birmingham