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CARREFOUR FACES HEFTY FINE FOR ALLEGED VIOLATION OF CONSUMER PROTECTION LAWS

Hypermarket probed

THE CLEARANCE sale of the century may result in a hefty Sk2 million (€51,864) fine for the hypermarket retail chain Carrefour.
The Slovak Trade Inspectorate, the main body in charge of market surveillance in the non-food area, claims that Carrefour duped its customers during its New Year's clearance sale when the retailer failed to supply products publicized in its circulars and charged consumers more for items than the advertised price.

THE CLEARANCE sale of the century may result in a hefty Sk2 million (€51,864) fine for the hypermarket retail chain Carrefour.

The Slovak Trade Inspectorate, the main body in charge of market surveillance in the non-food area, claims that Carrefour duped its customers during its New Year's clearance sale when the retailer failed to supply products publicized in its circulars and charged consumers more for items than the advertised price.

According to the circulars promoting Carrefour's New Year's clearance sale, ten thousand products would be on sale in the supermarket's branches in Bratislava, Košice and Žilina. But when customers turned up for the event, they faced "sold out" signs or prices higher than advertised.

New Year's clearances are a relatively new phenomenon in Slovakia. The Carrefour event caused something close to hysteria.

Roads surrounding Carrefour stores throughout the nation were clogged with traffic. In several instances the police were summoned to coordinate traffic flow. Ambulances and emergency units were kept on alert.

On the day of the sale, some customers stood in check-out lines for hours to purchase goods. The Slovak media reported queues forming outside the stores the night before the advertised sale, with enthusiastic buyers jockeying for position to rush the doors at opening time.

Carrefour apologized to its customers for any inconvenience. Spokesperson Jana Havlíčková said that the supermarket chain did not expect the advertising campaign to mobilize such a large volume of consumers.

Danuša Krkošová of the Slovak Trade Inspectorate told The Slovak Spectator that the market surveillance body has not yet initiated legal proceedings against the supermarket chain as Carrefour is still under investigation.

Preliminary checks revealed that Carrefour offered just two products at the 95-percent discount price advertised in the circulars: a camera and a shaver. Supplies were limited - in the case of the shaver, drastically so. Six shavers were available for purchase on sale day, and only in Carrefour's Polus and Danubiana centres in Bratislava.

Other store discounts varied between 27 and 78 percent.

"The store did not offer the products advertised on the circulars. Prices in the stores on the day of the sale did not match the advertised 95-percent discount," Krkošová said.

She provided an example in which the clearance price for an overcoat was arrived at by calculating the discount from its original marked price of Sk6,000 (€155) instead of the latest recorded price, which was Sk2,000 (€51).

"They confused the consumer," Krkošová told The Slovak Spectator.

According to the Slovak Trade Inspectorate, Carrefour violated fair advertising laws as well as legislation protecting consumers from ploys designed to influence economic behaviour.

The Sk2 million (€51,864) fine is the highest that the Slovak Trade Inspectorate can impose on a business entity. However, if the inspection reveals repeated violations, the organization could raise the fine to as much as Sk10 million (€259,289).

Carrefour defended itself by saying that the principle of clearance sales is the same throughout the world: retailers slash the prices of products they wish to "move" quickly, particularly seasonal items and those that threaten to outstay the shelf-life desired.

Havlíčková insists that Carrefour did not dupe its customers.

"The law was observed [during the Carrefour clearance sale]. It is not in our interest to lie to our customers," Havlíčková told The Slovak Spectator.

Carrefour's stores in the Czech Republic are also facing potential fines.

The retailer there made no secret of the increased sales generated by the clearance campaign.

According to Carrefour's spokesperson in the Czech Republic, sales increased 2.5 times compared to last year.


(Magdalena Macleod contributed to the report.)

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