Charges Against Bunnings Dismissed

Certain rules for interpreting whether broad marketing statements comply with the Fair Trading Act 1986 (FTA) were clarified in a 2021 case brought by the Commerce Commission against Bunnings .

The Auckland District Court dismissed charges that Bunnings had misled consumers regarding its prices when it made statements such as ‘lowest prices are just the beginning’, ‘lowest price guaranteed’, ‘lowest prices on all your DIY jobs’ and ‘unbeatable prices’. The Commerce Commission claimed such statements breached the FTA by misleading consumers into thinking Bunnings had the lowest price on all of its items, when in practice it did not.

In finding Bunnings successful, the court considered the following key factors:

• Bunnings routinely conducted surveys of competitors’ prices and had processes for adjusting prices if a competitor’s pricing was found to be cheaper

• A reasonable consumer would be aware that a store the size of Bunnings could not know on a daily basis exactly what competitors were charging for every product and that a small number of products may be more expensive

• The guarantee to beat a lower priced product by 15% implied that some items may be cheaper elsewhere, but it provided a means to ensure consumers could get a lower price at Bunnings, and

• There was no evidence that consumers had complained of being misled by Bunnings and only one of its competitors had made a complaint.

This case provides guidance to businesses when making broad marketing statements. You should, however, be aware of your obligations under the FTA; if you are unsure about any aspect of the legislation, we can help.

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