Safeway Supermarkets settles in false advertising and unfair competition lawsuit

safewayVENTURA, California – District Attorney Gregory D. Totten announced today that Safeway Inc., the second largest food and drug retailer in North America, has agreed to settle a civil law enforcement action alleging they engaged in false advertising and unfair competition, as well as violated a 2008 Marin County injunction. The action was filed by the district attorneys of Alameda, Fresno, Marin, Napa, Sacramento, Santa Cruz, Solano, Sonoma and Ventura Counties in Marin County Superior Court.

The complaint alleges that Safeway unlawfully charged consumers prices higher than Safeway’ s lowest advertised price, misrepresented the weight of Safeway-branded products, and made statements on in­ store signage that conveyed that certain Safeway produce items were “locally grown” when in fact they were sourced from other countries.

The complaint further alleges that Safeway failed to abide by provisions of a 2008 injunction requiring Safeway to initiate and maintain a program to minimize pricing discrepancies. The injunction mandated that Safeway institute a price-accuracy policy requiring Safeway to give California consumers an item free if overcharged for an item priced at $5 or less; or if over $5, charge the correct price and give the consumer a $5 gift card. The complaint alleges Safeway failed to always honor the policy and failed to adequately notify consumers of the requirement with signage at every check stand.

Under the settlement, Safeway must retain an independent third-party auditor to conduct annual audits of Safeway’ s compliance with permanent injunctive provisions. In addition, Safeway must take significant new measures to increase price accuracy including, but not limited to, increasing the number and visibility of store signs notifying consumers of the price-accuracy policy and instituting training for employees on complying with the policy. The final judgment  orders Safeway to pay $2,250,000 in civil penalties, investigative costs, and restitution to investigating agencies.

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