The Danish Consumer Ombudsman [ DCO] has reported a major player in the Danish retail market, Coop Denmark, to the police for use of misleading price information in their Christmas catalogue in 2004.
The DCO chose to inform the police following his discovery that in many cases the catalogue did not say which other price was the standard of comparison when it quoted its bargain prices. According to DCO practise, unless anything else is stated, the standard of comparison is taken to be the retailer’s own previous price. For the majority of the products this, however, was not the case. The retailer was, in fact, comparing its prices to those charged by other retailers and RRPs suggested by its suppliers without explicitly referring to this in the catalogue.
"Price reductions and discounts have a major impact on whether or not the consumer goes for the deal – hence the importance of credible price information," says DCO Hagen Jørgensen, who currently keeps retailers’ use of price marketing under close scrutiny.
Leading the investigation is a local chief of police authority, who will decide whether Coop Denmark is to face a charge.
Section 2 of the Danish Marketing Practises Act makes it an offence to make use of incorrect, misleading or unreasonably incomplete statements likely to affect the supply and demand of goods. Pursuant to section 2(4) of the said Act, it lies with the retailer to substantiate the correctness of the information provided. Violations are punishable by fine.
For more details about price information and marketing, please consult the DCO Guideline on Price Information and Marketing.