President Chain Store Corporation made false advertisement in the Buy 3 Get 1 Free promotion of Cha Li Wang Product, a violation of Article 21 of the Fair Trade Law

Chinese Taipei

Case:

President Chain Store Corporation made false advertisement in the Buy 3 Get 1 Free promotion of Cha Li Wang Product, a violation of Article 21 of the Fair Trade Law

Key Words:

promotion, price, advertisement

Reference:

Fair Trade Commission Decision of March 24, 2005 (the 698th Commissioners' Meeting); Disposition (94) Kung Ch’u Tzu No. 094031

Industry:

Chain Convenience Store (4753)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. On October 13, 2004, the Fair Trade Commission received an e-mail from the general public prosecuting 7-11 (President Chain Store Corporation, hereinafter referred to as President Chain Store) Tung Chuan convenience store, stating that there are advertisements of Buy 3 Get 1 Free promotion for some beverages posted in the store. Therefore, the complainant was ready to buy three bottles of Cha Li Wang Green Tea on that day, but the store clerk told the complainant that the aforementioned promotion has already ended. However, the posters in the aforementioned convenience store of President Chain Store and the website thereof (www.7-11.com.tw/product/index.asp) still have messages about the promotion in this case, furthermore, it was stated that the promotion will last until October 26, 2004. The advertisement of President Chain Store is suspected to be false and violates the provisions of the Fair Trade Law.
   
2. Upon an investigation, the Fair Trade Commission found that President Chain Store has published an advertisement of “Buy 3 Get 1 Free for several types of packaged beverages, apple soda …….Cha Li Wang – Japanese green tea, Cha Li Wang- Taiwanese green tea…….”, the aforementioned advertisements were posted on the display shelves’ signboards of 7-11 convenience stores all across the nation and the website www.7-11.com.tw. Also, the advertisements stated that the promotion period was from September 29, 2004 to October 26, 2004, giving the public an impression that the consumers, for all types of beverages represented in the advertisement, may have the premium of “Buy 3 Get 1 Free” during the period of promotion, that is from September 29 to October 26. In considering the fact that the purpose of advertisement is to tout for consumers, the principal of such advertisement, in the case of publishing promotional advertisement on special offer products and its related news, must bear the obligations of ascertaining the true representation of an advertisement and pay attention to the correctness of the advertisement. The Fair Trade Commission has conducted spot checks of President Chain Store’s convenience stores and found that the products of Cha Li Wang in this case were not sold in the manner of special offer as indicated in the representation of the advertisement. Also, the reports of purchase and sales provided by President Chain Store indicated that in accordance with the representation of the advertisement, the duration of special offer for the two products of Cha Li Wang in this case was only from September 29, 2004 to October 12, 2004. At the same time, President Chain Store confessed that, for some reasons, the special offer of “Buy 3 Get 1 Free” for Cha Li Wang products in this case was cancelled on the day of October 13, 2004. Therefore, beginning from October 13, 2004, President Chain Store has not sold the products in this case according to the representations of advertisement. Although President Chain Store claimed that the advertised messages have been corrected, but the Fair Trade Commission did not see any of the aforementioned corrected messages at the convenience stores of President Chain Store in the spot checks conducted on October 15, 2004. In addition, the investigation also found that the website of President Chain Store, www.7-11.com.tw, still published the “Cha Li Wang” special offer messages in this case until October 14, 2004. Such acts were not conformed to the fact that President Chain Store has stopped the “Buy 3 Get 1 Free” special offer of the aforementioned two products since October 13, 2004. Therefore, President Chain Store has amended some special offer product items in the original advertisement prior to the end of the promotion that caused inconsistence with the advertised representation. It is found that the advertisement in this case is false and misleading, also in violation of the provision of Article 21 (1) of the Fair Trade Law.
   
3. President Chain Store argued that the company has promoted other type of beverages to compensate the consumers on October 13, 2004. However, the matter concerns with the consumers’ taste and preference selections and also a question of whether the aforementioned beverages can substitute for the original products in this case. In addition, President Chain Store stated that the fact that the message of Buy 3 Get 1 Free special offer for Cha Li Wang products in this case were still posted on the website on October 13, 2004 and October 14, 2004 should be considered as the result of the appointed management company’s improper operation. In considering that President Chain Store has relied on the Web Page to spread the messages of products’ special offer, then, the company, as the principal of such advertisement, must do its utmost to pay attention to the truthfulness of the Web Page content when there is an alteration of the promotion; the responsibility of the company shall not be exempted for any internal management negligence between the appointed management company. Therefore, the advertisement in this case has false and misleading representation, also in violation of the provision of Article 21 (1) of the Fair Trade Law.

Summarized by Yang, Yi-Wen;
Supervised by Wu, Lieh-Ling

Appendix:
President Chain Store Corp.’s Uniform Invoice Number: 22555003