K MART Canada Limited Fined $200,000 for the Count of Misleading Advertising

OTTAWA, April 13, 1995 — George N. Addy, Director of Investigation and Research under the Competition Act, announced today that K MART Canada Limited/Limitée pleaded guilty to one charge under 52(1)(a) of the Competition Act and was fined $200,000 in the Provincial Court (Criminal Division) in Brampton, Ontario. The court also issued an Order against the company and its officers and directors prohibiting them from repeating the offence.

The charge related to a series of advertisements published by K MART during 1991 in daily newspapers in Ontario, Quebec, New Brunswick and Nova Scotia, promoting a mattress sale which offered savings of "50% off" the after sale price. It was determined that the savings claims were untrue and that K MART sold most mattresses during the advertised "sales". In fact, mattresses were not items kept in stock after the sale had ended.

"This case is the latest example of a successful prosecution against a retailer involving misleading regular price claims," Mr. Addy said. "The enforcement action taken in this case is in line with the Bureau of Competition Policy’s commitment to promote accuracy in advertising."

Paragraph 52(1)(a) prohibits materially misleading representations to the public in the promotion of a product.

For more information, please contact:
Jim Walker
819-997-1212