Southland's largest appliance retailer, Rice Refrigeration Limited, has admitted that it breached the Fair Trading Act by making misleading claims about prices.

Commerce Commission Fair Trading Manager Rachel Leamy said Rices made misleading claims that it had reduced the prices of several ranges of products, including gas and oil heaters, breadmakers, dishwashers televisions and chainsaws. The savings claimed ranged from $20 to $400.

"There were no special offers," Ms Leamy said. "None of the goods had been sold at the higher prices and all had been consistently sold at the lower prices."

The misleading claims were made in advertisements published in the Southland Times from May 1 to September 11 this year.

The Act prohibits false or misleading claims about prices. Recent court decisions have reinforced that claimed savings must be real and their descriptions accurate.

For example, some of Rices' advertisements claimed that its price of $399 for a chainsaw was a saving of $100 from the recommended retail price (rrp) of $499. Courts have ruled previously that if a comparison is made to an rrp, then the advertiser must have charged that price. Rices had not charged the rrp, and $399 was its normal price.

Ms Leamy said the Commission is satisfied that Rices interpretation of the Act was incorrect and that it did not deliberately set out to deceive customers.

The Commission has ended its investigation with a settlement with Rices . The company has given signed undertakings that it:

* breached the Fair Trading Act by making misleading claims about prices;

* will organise and pay for a Fair Trading Act compliance seminar given by the Appliance Guild for appliance retailers in Invercargill;

* will ensure all its future pricing claims are accurate;

* will put in place a compliance programme to ensure its staff are familiar with the Fair Trading Act;

* will report to the Commission on the undertakings; and

* have the Commission publicise this settlement.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908, cellphone 021 662 773

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz