Bond and Bond Limited admitted in the Christchurch District Court that a series of advertising campaigns running for four months was misleading and breached the Fair Trading Act.

The Commerce Commission prosecuted Bond and Bond specifically in relation to 34 advertisements published in the Christchurch Press. Commission Chairman Dr Alan Bollard said that Bond and Bond had also used identical advertisements, except for the localities of the shops, in the four major cities.

The misleading claims fell into three categories:

· incorrectly stating manufacturers' recommended retail prices;

· claiming that there were savings off Bond and Bond's usual prices, when the company had not normally changed the prices; and

· goods were advertised as interest free, when interest free terms were not available because there was a lower cash price.

In the Christchurch Press, incorrect recommended retail prices were used 179 times in the four months of advertising.

Throughout that time, Bond and Bond ran a series of promotions, including a "spring shopping extravaganza", an "expo" and a "pre-Christmas price blitz". Prices for most of the advertised products remained the same, they were not reduced, and in some cases prices rose during a promotion.

Advertisements stated that goods were available on "up to 3 years interest free" terms, when no goods were genuinely available on interest free terms. What was called the "interest free price" was between 20 percent and 40 percent higher than the cash price.

Dr Bollard said that almost half of the enforcement actions taken by the Commission are about false or misleading prices.

"Customers lose out because they do not get the better deal they believed was available," Dr Bollard said. "Competitors miss out because they lose business because of unfair trading practices.

"Perhaps the greatest problem is that if a trader like Bond and Bond, which now has 40 stores around the country, uses false or misleading promotions, then others may feel they need to do the same to compete.

"Such an extensive campaign by New Zealand's major appliance retailer had the potential to force all other appliance dealers to use false or misleading advertising to survive."

In the year ending 1996, Bond and Bond had a turnover in excess of $120,000,000.

A sentencing date has not yet been set.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908, home (04) 386 3110, cellphone 021 662 773

Communications Officer Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432