Zamel's catalogues misleading

By Belinda Smart

26 Aug 2008

ADELAIDE: Ascot Four, the previous owner of jewellery retailer Zamel's, has been convicted in the Federal Court, Adelaide, of making false and misleading representations about the price of goods. The conviction follows an investigation into Zamel's Christmas 2005 catalogue by the Australian Competition and Consumer Commission (ACCC), for which the Commonwealth director of public prosecutions laid charges against the retailer on December 20 2006.

The charges related to 2.6 million Christmas catalogues distributed by Zamel's across South Australia, the ACT, Victoria, Western Australia and Tasmania, in which 11 jewellery items featured a sale price next to a strike through price. The court found that Ascot Four engaged in conduct in breach of the Trade Practices Act 1974, by falsely representing that it had sold each of the 11 items at the strike through price within a reasonable time prior to the sale period. 

Ascot Four was also found to have falsely represented that purchase of each of the 11 items during the sale period would result in a saving to the consumer of the difference between the sale price and the strike through price.

Justice Mansfield of the Federal Court specifically noted that: "having regard to the previous sales of each of the 11 jewellery items, the purchase of any of those 11 items during the sale period would not result in a saving to the purchaser of the difference between the sale price and the strike through price.  In no case had the defendant sold any of those items […] at anywhere near the strike through price."

ACCC chairman Graeme Samuel, said comparison price advertising was a common practice in a number of industries. 

"This conviction shows that advertised discounts must be real and not illusory. If you make a was/now price comparison or use a strike through price, you must have genuinely offered the product at the 'was' or strike through price for a reasonable period immediately before the sale promotion."