Home Chain Foods Ltd.

Case:

Key Words:

promotional advertising, gift

Reference:

Fair Trade Commission Decision of June 13, 2012 (at the 1075th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 101062

Industry:

Retail Sales in General Merchandise Stores with Food, Beverages or Tobacco Predominating (4711)

Relevant Laws:

Paragraph 1 of Article 21 of the Fair Trade Law

Summary:

1. According to a media story, the Burger King Chain managed by Home Chain Foods Ltd. (hereinafter referred as Home Chain Foods) started the promotional activity of"Buy a triple-patty rodeo whopper and get the second set or a whopper series meal for free" on December 1, 2011. However, the stores ran out of double-patty burger meals in less than 3 days and could only provide whopper meals. False advertising was suspected and the FTC therefore initiated an ex officio investigation.
2. Findings of the FTC after investigation:
   (1) Home Chain Foods posted the Triple-patty rodeo whopper comes with a free meal "advertisement on the Burger King website between December 1 and 9, 2011 and in Upaper on December 5, 2011. The advertisement contained the wording of"starting from December 1, for 9 days, anyone buying a triple-patty rodeo whopper meal after 4PM will get a double-patty burger or whopper series meal for free "and“ the choice of whopper series meals is limited to original flavor whopper, spicy whopper, Sichuan-style spicy whopper, Taiwan-style spicy whopper, and Texas spicy whopper."
   (2) The FTC's investigation showed that the Burger King stores did not offer any choice to consumers buying the triple-patty rodeo whopper meal like it was indicated in the advertisement. There was actually a restriction on the choice of the free item. In some stores, consumers could only get the original flavor whopper meal and were unable to choose the double-patty burger meal or any of the other spicy whopper meals while in some other stores, they were only given the choice between whoppers of certain flavors.
3. Grounds for disposition:
   The advertisement from Home Chain Foods gave consumers the impression that anyone buying a triple-patty rodeo whopper meal during the promotion period could choose a double-patty burger meal, original flavor whopper meal, spicy whopper meal, Sichuan-style spicy whopper meal, Taiwan-style spicy whopper meal, or Texas spicy whopper meal as the gift. However, during the promotion period, a rather large number of retail outlets of Home Chain Foods did not offer the items indicated in the advertisement for consumers to choose. In fact, a lot of retail outlets restricted the choice of the free item. The actual gift-giving approach was inconsistent with the content of the advertisement. In other words, the said advertisement had caused the public to have the wrong perception or make the wrong decision. Consequently, it was a false, untrue, and misleading representation in violation of Paragraph 1, Article 21 of the Fair Trade Law. The FTC imposed an administrative fine of NT$100,000 on the company.

Summarized by Cheng, Shih-Yu ; Supervised by Chi, Shueh-Li

Appendix:
Home Chain Foods, Ltd.'s Uniform Invoice Number: 23309178