Supermarket sales tactics may be rip-offs, but they are legal says the Office of Fair Trading

In January 2012 the Office of Fair Trading (OFT) launched an investigation on “Retail food pricing and promotional practices”. The investigation was closed on 30^thNovember 2012, when  the OFT courageously announced

“The OFT has made no finding that the supermarkets have breached the law or were engaging in misleading promotional practices.”

That the supermarkets did not breach the law is not a surprise. British consumer protection law in the form of the “Consumer Protection from Unfair Trading Regulations” is a charter for rip-offs. The law explicitly states that deception is perfectly legal so long as it only deceives the less than average consumer. 


Incredibly it is also explicitly legal under this law for a trader to knowingly engage “in a commercial practice which contravenes the requirements of professional diligence” so long as his actions are not “likely to materially distort the economic behaviour of the average consumer with regard to the product under regulation”.  Blimey! 

But while the law only protects the more than average half of Britons, the Office of Fair Trading provides detailed guidance so even the most brutishly stupid retailer will understand how to skirt around consumer protection law if he is so inclined. A kind of 'no retailer left behind' scam tutorial.

To help the dimmer retailers OFT's guidance provides pictures to make sure retailers don't need a moral compass to navigate the law. The law identifies 31 practices that are banned under all circumstance. But apart from those 31, anything goes so long as it only hits the 'less than average'.

Although the above graphic from the OFT's "Guidance on  the Consumer  Protection from Unfair Trading  Regulations  2008" states that it is "Unfair if they cause consumers to take a different decision", the law itself clarifies that this only protects the "average" consumer as stated in these extracts from the legislation: 

• A commercial practice is unfair if…..it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product. 
• A commercial practice is a misleading action if…. it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. 
• A commercial practice is a misleading omission if, in its factual context…. it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. 

In short, if only the less than average consumer – amounting to half the targeted customers – is tricked then that is fine.

Further help for the fraudulently inclined is provided in the OFT roadmap below. Our annotations on this OFT roadmap for retailers on how to tell "Is the Practice Unfair" are in RED:

It is rather touching that the OFT can't bring itself to say the practice is "FAIR", only that it is "NOT UNFAIR" and therefore legal.

We have written about this phenomenon in banking, insurance, pensions, energy, transport, mobile phones, and now supermarkets. So back to the Supermarkets investigation. In its conclusion the OFT proudly trumpeted:

“Eight supermarkets have agreed to a set of OFT principles to address concerns over special offers and promotions for food and drink.”

Sounds promising? So when do these principles come into force? And how harshly will they be enforced?  The OFT is helpful here too, but not to us ripped-off Britons, stating:

“The principles do not 'come into force' on any particular date. They clarify existing guidance and should not be seen as rules with an implementation date.”

So the eight supermarkets have simply said they will stop ignoring what the OFT has already been saying. 

What is truly revealing is not that the supermarkets pull off stunts to rip us off. Not much surprise there. What is truly revealing is these stunts, even when put under the regulatory microscope by the OFT, are found to be legal!

As we have pointed out in previous posts, British law regards Britons as the lawful prey of businesses. The law regards us rather as a gamekeeper regards pheasant and grouse: we are worth protecting because we make such good eating. The law is happy for us to be ripped off so long as it is only the ‘less than average’ half of us that are the victims. It is the law of the jungle. 

However, the law of the jungle has a benefit. It makes species stronger by natural selection.

Consumer law does not make anybody stronger. The law refusing to protect the 'less than average' simply unleashes rippers-off, licencing them to rip off the vulnerable. By allowing retailers to rip us off it gives a competitive advantage to them over retailers who are honest. Driving honest retailers out of business. Making the 'retailing species' more corrupt.

To be fair to the OFT they just enforce the law created by Parliament. If the law says it is legal, then it is the law that is the problem.