Surcharge Sinners: an investigation
Lauren Said-Moorhouse & Amanda Hoh | Chief Editors
Patrick Wright | Radio Atticus
All information presented in this investigation is correct as of June 6, 2010.
Data collected between May 17 and June 6, 2010. View Weekend & Public Holiday Surcharges in a larger map
Restaurants and cafés in Australian capital cities are flouting consumer protection laws and illegally charging patrons on weekends and public holidays.
In May 2009 the legislation of the Trade Practices Act 1974 was amended with Section 53C stipulating that restaurants and cafes are required to incorporate any additional surcharges into the prices listed on their menus.
One way to do this is for restaurants to print a second menu just for weekends and public holidays.
However, from May 17 to June 6, an investigation conducted by Reportage Online and Radio Atticus found that in Sydney alone, over 50 restaurants and cafés are failing to observe the changes to the law.
“This component pricing issue is nothing to do with the rights and wrongs of weekend surcharging but everything to do about how you implement the law,” says Chris Zinn from consumer advocacy group, Choice.
“The ACCC [Australian Competition and Consumer Commission] seems unambiguous about this as to say ‘No asterisks, no small print. You’ve got to have a separate menu with the prices clearly spelt out’.”
During the three-week investigation, the businesses that we found had either a weekend or public holiday surcharge – and no second menu. Instead the surcharge was highlighted at the bottom of most menus with an asterisk.
Listen to the story originally broadcast on Radio Atticus:
The ACCC is the national body that enforces consumer protection laws like Section 53C.
Deputy chairman of the ACCC, Michael Schaper says, “The ACCC is serious about the law. We act on complaints we get from consumers. We act on our own investigations and advice.
“Interestingly enough, we’ve recently had a look at compliance within the restaurant and catering sector within particular cities and our evidence today indicates that there is actually not a big issue for most industry participants. Something like three-quarters of restaurants that we’ve surveyed in Canberra, for example, are compliant with the new laws.”
In half an hour after the interview with Schaper on June 3, Reportage and Radio Atticus journalists found five restaurants in Canberra’s CBD which failed to comply with the law.
One restaurant, Tosolini’s, had a 20 per cent surcharge on public holidays – the highest we found during the investigation.
Tosolini’s is just around the corner from the ACCC building.
Zinn also says restaurants should be aware of the law change as it has been over a year since the amendment.
“One would have thought the message has been sent out there very clearly. They have trade bodies. They have all sorts of information. So the message should have got through.”
However, manager of the Waterfront Grill in Sydney’s Darling Harbour, Jeremy Sloss, says that wasn’t the case.
“I had a customer dining in our restaurant who said that you are no longer allowed to charge a 10 per cent surcharge. It has to be the same out the front and same price in the menus on a Sunday and a public holiday.
“And we never had any emails sent from ACCC and the Restaurant and Catering Association. We never got a specific email sent to our company in regards to that.”
John Hart is CEO of the Restaurant and Catering Association in Australia. He says it’s not the association’s responsibility to enforce the ACCC’s laws.
“We are not charged with enforcing the ACCC’s legislation. That is for the ACCC to do. All we can do is pass information to businesses and suggest that that is the way they do their thing. We are not a government agency. We are not an enforcement body. We provide advice to business and that is exactly what we will be doing.”
Hart also says that the ACCC failed spectacularly in consulting the restaurant industry prior to passing the law.
“There was very little information that flowed out on what the requirement was for restaurants particularly. We’d understood at that point that we wouldn’t be included in the net because we thought restaurant menus were exempt from the component pricing requirements.”
“The original rash of information that came out from the ACCC didn’t have any supporting material around what restaurants needed to do,” he says.
But Schaper disagrees.
“In terms of making sure that the industries were informed well in advance of the start date, it’s simply the case that the commission did consult fairly widely and fairly broadly with it,” says Schaper.
Editor’s note: This investigation was conducted by Reportage and Radio Atticus between May 17 and June 6, 2010.
Any businesses named as not complying with section 53C of the Trade Practices Act, was correct during this period.
Reportage and Radio Atticus are aware that since the investigation ended, some restaurants and cafes have now changed their policies.
Additional reporting by Paul Farrell, Nastasia Campanella, Alex Taylor, Bonnie Yiu, Steve Corner, Kathryn Gall, Amy Yang, Neda Vanovac and Patrick Tombola.
Read the follow-up story: Consumer watchdog takes cafes to court