Genesis fitness centre fined for blaming carbon tax for price rises

Phillip Hudson
August 01, 2012
Herald Sun

A GYM has become the first business to be penalised for wrongly blaming the carbon tax for price rises.

The Genesis Fitness Club in Berwick, 45km southeast of Melbourne, has been issued with a $6600 infringement notice on the one-month anniversary of the introduction of the carbon tax.

Australian Competition and Consumer Commission chairman Rod Sims said the gym sent a letter to 2122 members in April promoting a “rate freeze” to beat the carbon tax.

It claimed a lengthy contract extension would save between 9 and 15 per cent.

“The ACCC believes that GFC Berwick did not have a reasonable basis for claiming the carbon price would increase the cost of gym memberships by 9-15 per cent,” Mr Sims said.

“We understand that over 200 members took up the offer and extended their contract. We are concerned that the false claims about the carbon price may have encouraged these people to sign lengthy contract extensions they otherwise would not have.”

“Businesses are free to set their prices as they see fit but must carefully consider the basis for making carbon price claims and ensure such claims are truthful and have a reasonable basis.”

Mr Sims said the CEO of the Genesis Division of Belgravia Health & Leisure Group Pty Ltd, the company which manages the franchise network, is writing to all affected members offering them the opportunity to withdraw from the contract extensions at no cost.

Mr Sims said a guide for business on their rights and obligations when making claims about the carbon price is available from the ACCC.

He also said the ACCC will also host an interactive online forum for small businesses on the August 16. Mr Sims said small businesses could ask the ACCC their key questions about carbon price claims. He said small firms can register on the website.