It has been more than 5 years since the promulgation of the Consumer Protection Act. In the beginning it was all hype - doom and gloom. In this comprehensive 4 part article we interview Janusz Luterek, from Hahn & Hahn to get a refresher and an update on this crucial piece of legislation.
Part 1 – Food marketing practices and the CPA
Linda: We have had the Consumer Protection Act signed into law on 24 April 2009 and it has been in full force and effect since 1 April 2011. One of the most important portions, which provides for the liability of the importer, manufacturer, wholesaler and retailer for any harm or damage caused by the goods they supply, already came into effect on 24 April 2010. Remind us again, exactly who should be taking note of the requirements in the supply chain?
Janusz: What both consumers and suppliers need to understand is that the Act applies to any transaction in which goods or services are supplied or offered to be supplied, or where a person is exposed to any goods or services regardless whether any supply actually took place, as long as the consumer is a natural person or a juristic person having a turnover or nett asset value below R2 million. So every supplier of consumer goods in South Africa is affected in some way.
Linda: What should food companies be aware of regarding marketing practices
Janusz: The Act prohibits discriminatory marketing between consumers on any Constitutional grounds, such as race, gender, sexual orientation, religion, and the like. However, specific provision is made for favourable treatment of pensioners over 60 and minors under age 18. In addition, discrimination based on purely commercial reasons, such as a milk distribution area which is economically viable, or minimum order value is also permitted.
There are extensive provisions regarding labelling and marketing, including strict regulation of direct marketing, promotional competitions, the use of language, the content of labels, and prohibitions against misrepresentations to and deception of consumers, especially the most vulnerable who are challenged either by literacy, language, age, or health.
Linda: What provisions are there for festive season specials?
Janusz: In the case of promotions or specials, there must be sufficient stock of the free or reduced price item to satisfy reasonably expected demand or else the exact number available on promotion must be stated. The days of specials where the retailer has less stock when advertising a special than when the product is sold at its usual price are numbered. The retailer will be liable to a consumer to supply the product at the advertised price for as long as the promotion period has not expired or until the stated limit of stock has been sold and "while stocks last" is no longer an acceptable practice.
Another practice that will bite the dust is the "E & OE" printed at the bottom of each advertisement and on which retailers rely if they have made an error in the advertised price. In terms of the Act, all goods for sale must be priced and only the displayed or advertised price may be charged unless the displayed or advertised price can be deemed to be "an obvious and inadvertent error" which in most cases would be very difficult for a retailer to prove, and even then the displayed price must be charged until the consumer has been informed of the error and of the correct price, presumably not while paying.
WHAT YOU NEED TO DO:
- Check and double check your labels
- Check your adverts
- Make sure you issue correction notices if mistakes are identified.
About the Author
Janusz F. Luterek, Pr.Eng for Hahn & Hahn Attorneys
For advice on compliance and other legal issues in the food industry contact Janusz Luterek at janusz@hahnlaw.co.za - your food lawyer.
www.hahnlaw.co.za
