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Whole Foods CEO admits overcharging: 'Straight up, we made some mistakes'

A week after a New York City investigation found that Whole Foods Market Inc. stores were overcharging for pre-packaged products, the company's co-chief executives admitted pricing mistakes were made.

The statement comes a year after the Austin, Texas, grocer agreed to pay nearly $800,000 in penalties for overcharging in California stores.

"Straight up, we made some mistakes," Co-Chief Executive Walter Robb said in a video posted Wednesday. "We want to own that."

Co-Chief Executive John Mackey said the "very, very small percentage" of "mis-weighing errors" occurred in fresh products like sandwiches, cut fruit and fresh squeezed juices.

"It's understandable, sometimes, that mistakes are made," Robb said. "They're inadvertent." 

He said they knew the errors were "unintentional" because the mistakes were both "in the customer's favor and not in the customer's favor."

To solve the problem, Mackey said the company would increase training in New York stores and across the country and implement a third-party auditing system to check on progress. In 45 days, he said the company will report back to customers.

In the meantime, Mackey said customers could double check with cashiers if they think there is a pricing mistake. If they are being overcharged, they will get the product for free.

The New York City Department of Consumer Affairs investigation tested the packages of 80 different kinds of pre-packaged products and found that all of the products had packages with mislabeled weights.

One example was a vegetable platter, which was priced at $20. The department inspected eight of these packages and found that customers were being overcharged, on average, by $2.50. One package was overpriced by $6.15.

Commissioner Julie Menin said inspectors told her it was the worst case of mislabeling they had seen in their careers.

The potential number of violations that Whole Foods faces for all pre-packaged goods in New York City stores is in the thousands, according to the department. The fine for falsely labeling a package is up to $950 for an initial violation, and up to $1,700 for a subsequent violation.

Last June, Whole Foods said it would monitor prices at California stores for five years as part of an agreement to settle the civil consumer protection case filed in Los Angeles. Under the court order, the company must also conduct random audits and choose employees to oversee pricing accuracy.

For more business news, follow @smasunaga.

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Copyright © 2016, Los Angeles Times

UPDATE

8:48 a.m.: This article has been updated with details about Whole Foods' settlement in California.

This article was first published at 7:48 a.m.

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