ASA Adjudication on HF Group AcquisitionCo Ltd

Ad

A magazine ad, for möben kitchens, stated "möben autumn sale ... every kitchen now 55% off ... plus up to extra 10% off all möben sale kitchens this week". Small print stated "Offers apply to kitchen units and appliances but exclude worktops. All offers only apply to UK mainland kitchen purchases over £3500 delivered within 28 days ... List price offers refer to Möben's current price list ..."

Issue

The complainant challenged whether the advertised discounts could be substantiated, because he believed the price list on which the discounts were made was not available to customers.

CAP Code (Edition 11)

Response

Möben said their price list was fully available for customers to see at the point of sale.  They explained that they offered a bespoke product that was made to the customer's exact requirements and for that reason they were unable to provide individual unit prices in their showrooms or in their advertising, because the price varied according to the kitchen fitted depending on, for example, the dimensions and conditions of the room.  They said that fully complied with the Price Marking Order (2004), which stated that when supplying goods with an installation service included the retailer did not have to show individual prices.  Instead they said they offered a free design service so that they could give customers individual quotations and at that point designers were encouraged to show the price list to customers, if they were asked to do so.

Möben said, like many retailers, they ran a list price model, where discounts could be applied once an order value and order quantity was reached. They said that was very common in businesses that offered a bespoke fitted product where design, delivery and installation were all part of the price.  They explained that at certain times of the year their kitchens were charged at the full list price, to comply with the requirements of the Consumer Protection Act 1987 and the Code of Practice for Traders on Price Indications.  They provided examples of instructions that were sent to their sales teams during October (the time of the promotion) which showed a list of the ranges which had to be sold at full list price.  They said rather than paying the full list price for a particular kitchen, customers would normally either select a range that was on promotion or they would delay their purchase until the range they wanted was on special offer.  

Möben sent a copy of the promotional information that was provided to designers about the 55% off promotion.  They also sent extracts of their price lists and several customer invoices, which demonstrated that a 55% discount had been applied to the list price of the kitchen units and appliances. They said they were in regular consultation with their local Trading Standards Authority and they had not raised any concerns about their advertising.    They pointed out that the Code of Practice for Traders on Price Indications stated "In any comparison between your present selling price and the last selling price at which the product was offered ..." and "In any comparison with your own previous price: (a) the previous price should be the last price at which the product was available ..."  They said that guidance therefore did not require them to demonstrate that a comparative high price had been charged, merely that it was offered at that price.

Assessment

Upheld

The ASA noted an ambiguous reference to "list price" was made in the barely legible small print of the ad.  We noted Möben had provided evidence, in the form of customer invoices, which showed that a 55% discount had been applied to the list price of kitchen units and appliances.  However, we noted they had been unable to provide evidence that the same units or appliances had ever been sold at the list prices.  We noted the Code of Practice for Traders on Price Indications required goods offered at a reduction from a comparative high price to have been offered or available at that price.  It went on to say that a previous price should be a genuine retail price at which goods could reasonably be expected to have been sold, and if it was higher than the usual retail price this should be made clear.  We noted the CAP Code stated "A recommended retail price, or similar, used as a basis of comparison should be genuine; it should not differ significantly from the price at which the product is generally sold".  We considered that Möben had not shown that their "list prices" were the prices at which the product was generally sold.  We also considered that consumers would expect kitchens were ordinarily sold at the non-discounted price.  We concluded that the advertised discount had not been substantiated and was likely to mislead.

The ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 15.5 (Prices).

Action

We told Möben to ensure that their advertised discounts related only to list prices which they could demonstrate were genuine.  We advised them to seek guidance from the CAP Copy Advice team before advertising similar offers.

Adjudication of the ASA Council (Non-broadcast)