The Commerce Commission is reminding those businesses who choose to apply a surcharge on public holidays that they must not mislead consumers. This follows a warning to a company that is a major provider of food and alcohol at Wellington's Westpac Stadium.

Spotless Services (NZ) Limited has been warned by the Commerce Commission that signs displayed on Waitangi Day 2009 and 2010 at the New Zealand International Sevens tournament were at risk of breaching the Fair Trading Act.

On those days, Spotless Services had signage in the public concourse area of the Westpac Stadium which stated "Please Note 15% Surcharge (Due to Holidays Act)". A Commerce Commission investigation found that Spotless Services recovered significantly more from the surcharge than the actual cost of fulfilling its obligations under the Holidays Act 2003 as many of the people serving food and alcohol at the tournament on Waitangi Day were either part of volunteer groups or casual staff and were not covered by the Holidays Act.

"The Commerce Commission has no role to play in businesses' decisions whether to apply a surcharge on a public holiday. New Zealand businesses are free to determine the retail price for goods and services and they do not have to justify their prices to customers," said Kate Morrison, Commerce Commission General Manager, Enforcement. "However, if a reason for a price is given, to avoid the risk of breaching the Fair Trading Act, that reason needs to be accurate and not misleading," said Ms Morrison.

"Many businesses decide not to apply a surcharge on a public holiday, but choose to absorb the extra wage costs as a cost of doing business. However, if businesses give the public holiday as a reason for applying a surcharge, to avoid the potential of misleading consumers, that surcharge should accurately reflect their costs of opening," said Ms Morrison. "The Holidays Act has been in place now for seven years and most businesses should be able to make an estimation so that any surcharge reflects their business cost for opening on a public holiday."

 

Background

Spotless Services (NZ) Limited provides a range of services throughout New Zealand including catering, facilities management, asset management and cleaning. Spotless has a number of venue contracts including the Wellington Regional Stadium Trust's Westpac Stadium.

The Fair Trading Act. Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.

The Holidays Act 2003 is enforced by the Department of Labour.