Don’t sell carbon ‘lies’, shops warned

Phillip Hudson
Herald Sun
May 25, 2012

SHOPS and restaurants could face fines up to $1.1 million if waiters or sales staff wrongly blame the carbon tax for price rises or exaggerate the impact.

And households are being warned to watch out for telephone scammers offering to deposit carbon tax compensation into their bank accounts.

The prices watchdog, the ACCC, will today launch its countdown to the July 1 carbon tax with a special focus on helping small businesses understand their obligations and consumers to be vigilant for false claims.

It is releasing internet videos to help business, a 16-page guide and has set up a dedicated website www.accc.gov.au/carbon.
ACCC deputy chairman Dr Michael Schaper told the Herald Sun companies were entitled to increase their prices and did not have to justify or explain why.

“It is business as usual,” Dr Schaper said.

But if they blamed the carbon tax they must be able to prove it and not use it as a cover for other price increases related to wages, rent or stock.

“If a business claims that a price is linked to the carbon price, that claim must be truthful and have a reasonable basis,” he said.

Dr Schaper said the warning applied to comments made by staff over the phone, on the shop floor or in meetings.

It also covers advertising, product labels, websites, invoices, contracts and contract negotiations.

The ACCC has the power to force a business to substantiate that a price rise has been caused by the carbon tax.

The guide explains what businesses can and cannot do, and provides a checklist to follow.

Dr Schaper said businesses must be sure price rises were “based on your own costs”.

The carbon tax – what the ACCC says you can and can’t do:

* A hair salon displays a new price list from July 1 saying all services will increase by 10 per cent due to the carbon price. It is aware input costs have risen such as rent, wages and cost of products. It estimates electricity costs will rise by about 4 per cent because of the carbon price.

ACCC Verdict: the salon would be overstating the impact of the carbon price and its claim is misleading.

* A sporting goods shop tells customers prices have risen by 11 per cent because of the carbon price. One of the shop’s employees spoke to another retailer who said their price was rising by 11 per cent and the owner decided that was a good estimate. The reality for his business is much less.

ACCC Verdict: The claim is misleading. The business should have looked at its own costs.

* A veterinary clinic puts up prices and says it is because the overall cost of running the business has increased. It does not link fee increases to a specific cause.

ACCC Verdict: This is acceptable business practice.

* A restaurant waiter tells customers all meal prices have increased because of the carbon price. The business has no factual basis to underpin the statement.

ACCC Verdict: The claim is misleading.

* An advertising agency makes a TV ad warning consumers to buy now to beat a 20 per cent price rise caused by carbon price. It overstates industry trends.

ACCC Verdict: The claim is misleading and the ad agency may have broken the law.