Price claims laws and codes haven’t changed for a while, but after a spate of DIY store ad bust-ups, the keepers of the UK’s self-regulatory “CAP Code” have demanded more care with prices in ads in a new Helpnote.
Who Committee of Advertising Practice
When January 2003
Where Torrington Place London WC1
With the Advertising Standards Authority handling three B&Q/Homebase spats in quick succession over comparative price claims (one of which is reported elsewhere on marketinglaw), the Committee of Advertising Practice's brand new "Helpnote on Retailers' Price Comparisons" is nothing if not timely.
Legalistic in content and tone, the Helpnote (available on www.cap.org.uk) says it does not "constitute new rules." However, after relevant extracts from the existing CAP code and a helpful reprise of applicable laws and other relevant regulations and Codes (including the 2000 amendments to the 1988 Control of Misleading Advertisements Regulations extending their ambit to comparative advertising and the often overlooked but still not superseded 15 year old "Code of Practice for Traders on Price Indications") there is a useful "Additional Guidance" section which will no doubt be wheeled out by the ASA against future transgressors who come before them.
Here there are some useful golden rules which retailers would do well to bear in mind when advertising in all media, not just the non broadcast channels covered by the CAP Code.
Retailers should not claim that their prices are lower than those of their competitors for all products when they are lower only for selected products
If there is a claim that prices are generally lower, the basis of the comparison e.g. a typical weekly shop, should be stated and the advertising retailer must be able to demonstrate that in context this is a "fair and suitable basis" for a general savings claim
Price comparisons should only be made with retailers in the same locality unless it can be shown that for example because of a national pricing policy operated by the retailer in question, location makes no difference
Ads should not exaggerate the length of time that their prices have been lower
If competitors are likely to change their prices quickly in response to others' advertising, media with a short shelf life such as leaflets and daily newspapers should be used
So far as possible products of the same or very similar quality should be compared e.g. own brand with own brand
Multiple pack prices should not be compared with competitors' single product prices multiplied by the relevant number
Ads should state clearly if prices featured in comparisons are promotional prices e.g. short term special offer prices. If such prices are quoted, these should normally only be compared with competitors' promotional prices. If not, the ad should make it clear that promotional prices are being compared with normal prices.
Why this matters:
In recent months there has been a steadily rising number of complaints in this area coming before the Advertising Standards Authority. The need for this new guidance is neatly given justification by the most recent case involving B&Q complaints over a national press ad for Homebase headlined "Homebase better deals, better prices (sorry B&Q)".
Homebase cannot be criticised of course for breaching the new Helpnote as the ad was devised and published months before the Helpnote's launch. Nevertheless the ad makes a pretty good fist of breaching an impressive number of the "Additional Guidance" points highlighted above. CAP Chairman Andrew Brown says the new Helpnote has been designed to deal with what has become a "very tense area." It is to be hoped also that the Helpnote inspires retailers to re-focus on legal and code compliance in an increasingly competitive marketplace.