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ASDA singled out by CMA over pricing practices

ASDA 24 hrs shutterstock_137105099 - 725 x 500

Asda is to change its price promotions after being singled out by the competition regulator in a probe into supermarket pricing practices.

Asda has given a commitment to the Competition and Markets Authority (CMA) that it will alter the way it presents promotional deals.

However, the supermarket said there were no specific findings against it.

The regulator was investigating whether supermarkets were misleading customers with confusing price promotions.

The investigation came after a super-complaint by the consumer group Which?.

At the time it issued the super-complaint, in April 2015, Which? cited several examples of what it called misleading pricing by supermarkets:

It found a 2 litre bottle of Pepsi on sale at £1.98 for 28 days, with the price subsequently lowered to £1 for 63 days. The label said "Was £1.98". The rules say such price promotions cannot last longer than the higher price period.

It also found tomato ketchup on sale with some bottles priced "per 100ml", while others were priced "per 100g", making comparisons difficult.

In July last year, the CMA said it had found evidence that supermarkets were misleading consumers with promotions, and found some examples that "could be in breach of consumer law".

August deadline

Presenting the CMA's latest findings, executive director Michael Grenfell said: "The CMA's examination of the market, following the super-complaint, found that supermarkets generally take compliance seriously, but there were some promotional practices that could mislead shoppers."

The CMA said it had "had particular engagement with Asda in relation to specific areas of concern".

It added that Asda had made a commitment to change the way it operates "was/now" and multi-buy pricing deals.

Asda has said it will ensure that:

"Now" prices will not be advertised longer than the "was" price on an item, ensuring there is a meaningful comparison.

Multi-buy offers will represent better value than a single product before the offer.

Multi-buy offers will not be immediately followed by "was/now" promotions, so it will be easier for shoppers to tell what is a good offer.

A spokesperson for Asda said, "All supermarkets were asked to review their pricing practices and make any necessary changes. The CMA has asked for a commitment from Asda on our promotional pricing rules and we were happy to provide this.

"It's important that customers know that the CMA did not make any findings against Asda, and it hasn't questioned our commitment to every day low prices."

The CMA said Asda had been asked to make the changes by August this year - and it would check how those changes were working six months later.

Richard Lloyd, Which? executive director, said: "We are pleased to see the CMA investigation has resulted in Asda taking action to stop misleading special offers.

"Asda has been found breaking the rules and now must immediately clean up their act."

Image: JuliusKielaitis / Shutterstock.com

Source : BBC News
www.bbc.co.uk/news/business-36147659 

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27 April 2016

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