The Office of Fair Trading has long been concerned with promotional pricing practices and what is considered to be “misleading” to the consumer. After recent outcries around certain promotions, the OFT decided to follow up its 2010 report, Advertising of Prices, with new market research into food pricing and promotional practices.

The research led the OFT to ask leading supermarkets to agree to new principles, which, in theory, had been designed to clarify what is and isn’t acceptable, and ultimately protect the consumer. However, although the principles initially appeared to be logical, on a practical level there is a noticeable inconsistency between what is now being advised and existing guidelines.

The new principles are concerned with pre-printed on-pack value claims and reference pricing, i.e. “was-now” pricing, where a previous selling price is used to highlight that the current selling price offers a saving. With regards to on-pack pricing, it is now considered misleading for a product to carry a message stating that it is the “best value” if there is another way of buying the same volume of product in the same store at a lesser price.

The principles’ guidance on “was-now” pricing practices impacts especially on seasonally priced products, for example soft fruit. Products such as these are sold all year round, but an increased supply in peak seasons means that prices are dramatically reduced. The OFT believes that comparing peak-season costs with off-season is misleading. Other new advice is that actively establishing a higher price in order to advertise a later discount is unacceptable.

The main inconsistency between existing guidance and the new principles is the exemption that allows the retailer to overlook the guidance, providing that the basis of the price comparison is made explicitly clear. The logic here is that if the retailer clearly explains the offer, it cannot be accused of misleading the consumer.

These inconsistencies may be addressed later in the year, as the OFT will be reviewing the Pricing Practices Guide. However, as it stands, the new advice is contradictory, includes far too much scope for retailers to opt out and, as such, can hardly be seen to address the serious concerns that have been raised over current pricing practices.

Consider this: no national retailer has ever been convicted for pricing offences under the Consumer Protection from Unfair Trading Regulations legislation. This suggests that concerns about “misleading” promotional pricing are not as substantial as these guidelines make out. True, if a promotion is misleading, it will be unlawful – but it will be unlawful regardless of whether these principles have been followed. To me, that makes these latest guidelines pretty unnecessary. —