Wine Pricing Suit Settled by Trader Joe’s : Courts: The specialty food store chain will pay $225,000. It does not admit wrongdoing.
Trader Joe’s Co. said Tuesday that it has agreed to pay $225,000 in penalties and costs to settle a lawsuit by Orange County accusing the chain of specialty food stores of making false price comparisons on wines.
Without admitting wrongdoing, the Pasadena-based company also agreed to a statewide court order that prohibits it from making the price comparisons of wine without first verifying what other stores charge and whether they even carry the same wines.
Trader Joe’s prides itself in offering unusual upscale food, wine and liquor at low prices at its 68 outlets throughout California and Arizona.
A lawsuit filed by the Orange County district attorney’s office stated that from February, 1992, through last summer, Trader Joe’s claimed in its Fearless Flyer advertising booklet that competing retail outlets charged much higher prices for certain wines, mainly California brands.
An investigation by the county prosecutor’s consumer protection unit, which acted on a complaint filed early last summer, found that other stores either didn’t carry the same wines or, if they did, sold them for less than what Trader Joe’s said its competitors were charging.
The district attorney’s office would not disclose who filed the complaint.
In a prepared statement, the company said Tuesday that it did nothing wrong but did “what it took to put this matter behind us.” The company paid a $150,000 civil penalty and $75,000 for the district attorney’s investigation costs.
“To their credit, once we brought our findings to their attention in late summer, they fully cooperated with us and addressed the matter,” said Robert C. Gannon Jr., a supervisor in the district attorney’s consumer protection unit.
Trader Joe’s executives conducted their own internal investigation after prosecutors asked them to substantiate the company’s advertising claims.
They turned over a large amount of documents for prosecutors to review, Gannon said, but the information was “insufficient to convince us that there was no violation.”
In maintaining that it was blameless, the company said the procedures it has agreed to follow in its wine advertising “simply acknowledge what we have always striven to do,” which is to give customers “an honest report about our products.”