darinsullivan.blogspot.com: Harvey Norman fined for misleading ad

Harvey Norman has been slugged $1.25 million for misleading advertising following action taken by the Australian Competition and Consumer Commission.
In September 2010, the retailer promoted the sale of 3D televisions in a catalogue that was widely distributed throughout the country.
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The Federal Court said the catalogues created the ''misleading and deceptive'' impression that consumers in all places where the catalogue was distributed could buy and use a 3D television to watch the 2010 AFL and NRL grand finals in 3D format.
However, the 3D broadcast was limited to Brisbane, Newcastle, Sydney, Melbourne, Adelaide and Perth.
City Index chief market analyst Peter Esho said the aggressive marketing of the Harvey Norman brand invites more scrutiny from watchdog agencies.
"These guys market very aggressively and the regulators want to make sure that someone who is very aggressively marketing new technology is aware of their obligations,” he said.
PR blow
Mr Esho believes Harvey Norman will be able to absorb the cost and that the error was most likely an oversight.
Still, the fine represented another public relations blow for the company, which is closely identified with chief executive Gerry Harvey.
"Gerry Harvey equals Harvey Norman in the public domain and in the perception of consumers," said Mr Esho. "That's very unfortunate for Harvey Norman as a listed company because it's run by franchisees and owned by investors."
Patersons retail analyst Russell Wright said the fine would probably account for about half a per cent of the company's $300 million pre-tax earnings next year.
"They haven't been pinged for such a big fine for some time," said Mr Wright. "This is quite significant."

Harvey Norman recorded pre-tax earnings of $373 million in 2011.
Discrepancies

Mr Russell said Harvey Norman has made "highly critical comments" of the regulator in the past. For its part, the ACCC has long focused on discrepancies between advertisements and the availability of those advertised goods at Harvey Norman.
Mr Harvey has made headlines over the past year by lashing out against online retailing, starting with his support for an ill-fated campaign to pressure the government into lowering the threshold from $1000 for the goods and services tax applied to merchandise bought online from overseas.
The ability of Australians to purchase goods from overseas via the internet is reshaping the local retail industry with electronics sellers such as Harvey Norman and JB Hi-Fi under pressure to adapt to the shift in consumer spending habits.