With an estimated global audience of over four billion, and 85,000 expected visitors, the event puts New Zealand in the international spotlight like never before.
The Commerce Commission enforces legislation that not only protects consumers but also ensures that businesses compete at a level playing field. As the country prepares for the increasing number of overseas visitors expected for the Rugby World Cup 2011, the Commission is paying particular attention to those sectors providing goods and services to tourists to encourage compliance with competition and consumer legislation.
Can we get the Commission to check that we do everything right?
We're running a competition. What do I need to know?
Can I charge any price I like?
Can I talk to other businesses?
I want to sell products that are made in New Zealand.
My product is good for the environment.
I want to use a third party to promote my business.
Can we get the Commission to check that we do everything right?
The Commission does not endorse or advise traders on how to ensure their advertising or practices comply with the Fair Trading Act.
However, we do produce resources for Fair Trading Act compliance programme and guidance on complying with the Commerce Act.
It is recommended you seek legal advice if you are unsure.
We're running a competition. What do I need to know?
Many businesses offer gifts or prizes as a way of attracting new customers. Make sure promotions are not misleading.
Can I charge any price I like?
There are many legitimate pricing techniques a business can use to promote its products and services, however, care must be taken to ensure consumers are not misled or deceived.
Example: Mr Smith researches rental car hire costs before he arrives in New Zealand. He finds a website that advertises rental car hire for $30 a day. He books a rental car to hire for four days. When he returns the car at the end of the rental period he expects to pay $120 but instead is charged $160. When he questions the extra cost, he is told that there was $10 a day charge for road side assistance. He was not made aware of this extra charge when he picked up the car. This is potentially a breach of the Fair Trading Act. Businesses must clearly identify the full cost to purchase a product or service upfront, so that consumers can make an informed decision about whether to purchase.
Can I talk to other businesses?
Be careful. Don't enter into any illegal agreements.
Illegal agreements include price fixing, bid rigging, market sharing and agreements to restrict output.
Can you give us an example?
Mrs Brown advertises her Auckland house for rent during the Rugby World Cup 2011. She advertises the rent as $1000 a week. She is entitled to set the rent at whatever she thinks the market will pay. However, she advertises the house as being "15 minutes from Eden Park" when this is not true. Making this false claim puts her at risk of breaching the Fair Trading Act.
After seeing Mrs Brown's advertisement renting out her house during the Rugby World Cup 2011, other people on her street also decide to rent their houses out during the Rugby World Cup 2011. They see from her advertisement that she is asking $1000 a week and decide that seems to be the going rate, so also advertise their homes for rent for $1,000 a week. This is called price-following and is not illegal.
Under another scenario, Mrs Brown calls a meeting of all the people in her street who are planning to rent their houses out during the Rugby World Cup 2011. She tells them if they charge any less than $1000 a week they will be undercutting each other. At the meeting, everyone agrees to charge $1000 a week rent. This is called price fixing and is illegal under the Commerce Act. These examples would equally apply in other situations, for example, for hotels or car rental companies. The law applies whenever goods or services are sold or supplied.
I want to sell products that are made in New Zealand.
Visitors will want to take a memento of New Zealand home. If you make a claim about the country of origin this must not be misleading or deceptive.
Example: Mrs Jones wants to buy souvenirs of her time in New Zealand to take back to her family in Wales and she wants to buy products that are made in New Zealand. She finds a shop called 'All New Zealand All of the Time'. She chooses a t-shirt that has pictures of a silver fern, a kiwi and the New Zealand flag on it, with a label on the back of the t-shirt saying 'All New Zealand'. However, when she gets back to Wales, she finds a small tag on the inside seam of the t-shirt which says 'Made in China'. This may be a breach of the Fair Trading Act. Businesses must avoid misleading consumers about where goods are made. It is not just words that can be misleading. Symbols such as kiwis, flags or other national emblems can also convey false or misleading impressions as to place of origin. Where such symbols are used on a product that was manufactured overseas, the Commission's view is that sufficient information should be put as prominently as possible on the label to indicate that the product came from elsewhere.
I want to sell healthy food.
Claims made about the health or nutritional benefits of a product must not mislead consumers and should be able to be substantiated.
My product is good for the environment.
Consumers are entitled to rely on any environmental claims made about a product or service and to expect these claims to be truthful and not misleading.
I want to use a third party to promote my business
Businesses need to make all efforts to ensure that any representations made about their goods or services through third parties, such as a booking agent or an online booking engine, are kept up to date and accurate.
Example: Mr Davis makes a booking through an international accommodation website to stay at a New Zealand motel for several nights during the Rugby World Cup. Having had his booking initially confirmed at a set price via the website, he is then contacted by the motel to say that the price for the period he was booking had not been updated and is in fact significantly higher. This would put both the motel and the accommodation website at risk of breaching the Fair Trading Act. Businesses need to make sure that their pricing and availability details are current and reflect the true cost at the time of booking.
Is there a fact sheet?
Yes, have a look at the next page.
