A prominent New South Wales restaurant recently agreed to pay a $15,000 penalty after a customer complained to the Australian Competition and Consumer Commission (ACCC) regarding the way prices were listed on its menu. Whilst the maximum fine applicable to licensees under the Liquor Control Act for failing to adequately disclose the price of meals is limited to $2,000, under the Trade Practices Act licensees can potentially be exposed to far greater penalties.
In this particular case, the restaurant’s menus did not specify in a prominent way or as a single figure, the price of items on Sundays or public holidays which in fact attracted a 10% and 15% surcharge respectively. The surcharges were only identified in small print at the bottom of each menu.
As a result of the complaint, the ACCC sent a letter to the restaurant advising it of its obligations under the s53C of the Trade Practices Act 1974 (Cth) requiring corporations making representations about the price of goods and services to specify in a prominent way and as a single figure, the price of those goods and services. The restaurant subsequently changed the menu so the prices for meals on Sundays and public holidays were displayed prominently and as a single price.
However, despite the restaurant having altered the menu in accordance with the ACCC’s letter, the ACCC issued an infringement penalty of $6,600. The restaurant attempted to have the infringement penalty set aside on the basis that it had amended its menu as instructed by the ACCC in its initial letter. The ACCC advised the restaurant the infringement would not be withdrawn. Upon non-payment of the infringement, the ACCC commenced court proceedings against the restaurant seeking enforcement of the penalty.
At a subsequent mediation, the matter settled. The restaurant agreed to pay a pecuniary penalty of $15,000. The settlement orders were approved by the Federal Court where Jagot J found that on the basis cafés and restaurants make representations to customers every day, the penalty was in the public interest given the need for specific and general deterrence. This case should act as a warning to all licensees who serve meals in their premises to ensure their menus comply with both State and Federal legislation.
Licensees are reminded there will be a nationwide police crackdown this coming Friday and Saturday night on alcohol related incidents in entertainment precincts.
Should you have any queries about this article, please do not hesitate to contact Dan Mossenson, partner on (08) 9288 6769 / dan.mossenson@lavanlegal.com.au or Jessica Patterson, senior associate on (08) 9288 6946 / jessica.patterson@lavanlegal.com.au.
