Consumer legislation does not regulate the price of products or services sold to consumers or the amount of profit sellers can make when selling their goods or services.
A free market economy generates competition, which encourages operators to offer products and services at advantageous prices. Free competition can also lead to improvement in the quality of products or services and even better customer care service.
Consumers benefit from a free market economy when they shop around and compare prices. However, to ensure freedom of choice, clear price indication is mandatory. There are, in fact, specific rules on how retailers should display their prices.
The Price Indication Regulations state that all types of products offered for sale must be clearly displayed with a price. The same rule applies to items displayed in shop windows.
Furthermore, the law stipulates that indicated prices should be unambiguous, easily identifiable and clearly legible.
Hence, it is not acceptable that price tags of products displayed in shop windows are hidden from the consumer’s vision. When more than one item of the same kind, size, type or brand of the same goods are displayed, the Price Indication Regulations provide that it is sufficient to show the price on just one of these items, or close by, such as on a label on the edge of a shelf, where the product is displayed for sale.
Moreover, the price displayed has to be the final price, without any ‘hidden’ or ‘extra’ costs, and it must be in euros.
Retailers are also legally obliged to indicate two prices on goods sold by weight, volume or measure. While one of the prices should indicate the actual price of the product for a given quantity, the other price, the unit price, should indicate the product’s price per kilo, litre, metre or cubic metre.
With regard to pre-packaged solid products preserved in a liquid medium, the price per unit must refer to the weight of the solid good without the liquid in which it is contained. The unit price may be indicated in a smaller font than the actual selling price, but it must still be legible.
A total of 946 outlets were found non-compliant, with verbal warnings given or warning letters issued accordingly
Unit pricing makes it easier for consumers to compare prices in different sizes as they compare the cost of one kilo or one litre of similar products.
The Price Indication Regulations do not apply when goods are sold at an auction, when goods are provided in the course of a service and also when goods are supplied for the purpose of reselling. Works of art and antiques are also exempt.
In the case of services, the service provider’s legal obligations are different. Since it is not always possible to display the price of all types of services available, the service provider is not legally obliged to display a price list.
However, traders must inform consumers of the total cost of the service, including taxes, and how the cost was calculated, before the sales contract is concluded. On the other hand, consumers should always ask for a quotation of the costs involved before purchasing a service.
Businesses such as restaurants, pubs, kiosks and cafeterias are required by law to display a list of prices that is visible from the street or at the entrance of the premises. These price lists should be clearly legible and up to date – the reason being that consumers should be in a position to compare prices of various establishments before entering.
Traders are bound to ensure full compliance with these regulations. They are also responsible for any infringements made by staff members. Non-adherence to these rules amounts to an offence and, if found guilty, traders are fined. In case of a second or subsequent conviction, traders can also have their trade licence suspended for a week.
To ensure adherence to the Price Indication Regulations, the Enforcement Directorate at the Office for Consumer Affairs, carries out regular inspections in retail outlets in Malta and Gozo. In 2018, this directorate carried out 17,800 visits and nearly 4,000 of these were carried out in main shopping areas. A total of 946 outlets were found non-compliant, with verbal warnings given or warning letters issued accordingly.
If during shopping consumers notice that prices are not indicated as legally required, they may report these traders to the Enforcement Directorate by calling Freephone 8007 4400 or by filling the online Flag a Concern form found on the authority’s website at www.mccaa.org.mt.
The report may be submitted anonymously. If, however, consumers would like to be informed about the developments regarding their report, they can leave their contact details.
Every report received by the authority is investigated and, where failures are confirmed, traders are required to regulate themselves.
Odette Vella is director, Information and Research Directorate, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.