Czech supermarkets rack up millions in fines for misleading discounts

That 40 percent discount may sound great, but if you dig a little deeper, you might find that the item in question was even cheaper just last week. Retailers often advertise discounts that may not reflect true savings, leaving consumers questioning the actual value of their purchases.

The EU Price Indication Directive mandates that when advertising sales, retailers must compare discounts to the item's lowest price over the last 30 days, rather than to arbitrary retail prices. However, throughout 2024, Czech supermarkets have been found to continually mislead consumers.

In the third quarter of 2024, the Czech Trade Inspection Authority (ČOI) imposed significant penalties on several major retailers, primarily Billa and Lidl, for not complying with pricing regulations, Novinky.cz reports based on newly-released Q3 data from the authority.

Billa received the largest fines, totaling CZK 940,000, after inspectors discovered seven violations during price checks. In one instance, a Billa store in Prague advertised a 40 percent discount on Heinz ketchup for CZK 44.90, claiming it was previously priced at CZK 74.90. However, the lowest price in the last 30 days had been CZK 39.90. As a result, the advertised discount was, in fact, a price increase.

Lidl was also penalized, receiving CZK 867,000 across five fines for similar violations, while Penny Market faced three fines amounting to CZK 240,000 and Tesco was fined CZK 167,000 for five violations. Albert, the country's largest supermarket chain, received a comparatively minor CZK 25,000 fine for two violations.

Despite the substantial fines, some industry experts argue that the penalties are not severe enough to deter deceptive practices, with retailers comparing revenue from advertised sales with potential fines.

"A large number of companies evaluate the following: what is the probability of receiving a fine, multiplied by the amount of the fine, compared to the profit I can achieve by violating the regulations?" marketing expert Robert Le Veneur tells Novinky.cz.

"In other words, companies have calculated well when it is profitable for them to disregard the rules."

In light of these issues, regulatory authorities and some politicians are advocating for increased penalties for misleading pricing practices to ensure fair trading. With the maximum fine for unfair commercial practices set at CZK 5 million, there are calls for higher penalties to more effectively curb misleading pricing tactics in the future.