Canada's Largest Sporting Goods Retailer Pays $1.7-Million for Misleading Consumers

"Consumers are misled and competition is adversely affected when retailers use inflated reference prices in sales promotions," said Raymond Pierce, Deputy Commissioner of Competition.

News Release
July 6, 2004

Canada's Largest Sporting Goods Retailer Pays $1.7-Million for Misleading Consumers
Competition Bureau Investigation Nets Record Penalty with The Forzani Group Ltd.
News Release

OTTAWA, July 6th, 2004 – Canada's largest sporting goods retailer, The Forzani Group Ltd. (FGL), which controls 391 stores, including Sport Chek and Sport Mart, has agreed to stop misleading consumers and pay $1.7 million in a Consent Agreement registered today with the Competition Tribunal.

After conducting a search at FGL headquarters in Calgary, the Competition Bureau concluded that FGL had significantly inflated the "regular" prices of certain products thereby overstating the savings to consumers at the so-called "sale" prices at its Sport Chek and Sport Mart stores.

"Consumers are misled and competition is adversely affected when retailers use inflated reference prices in sales promotions," said Raymond Pierce, Deputy Commissioner of Competition.

The Consent Agreement, which is designed to remedy the competitive and consumer impacts of FGL's practices, requires FGL to:

  • pay an administrative monetary penalty in the amount of $1,200,000;
  • pay all the costs of the Bureau's inquiry in the amount of $500,000;
  • cease making reference to inflated regular prices in its advertisements;
  • publish corrective notices in newspapers across Canada, in Sport Chek and Sport Mart flyers, on its corporate Web sites and in its retail stores across Canada; and
  • establish and implement a Corporate Compliance Program designed to ensure conformity with the deceptive marketing practices provisions of the Competition Act.

"The Bureau continues to commit its energies to cleaning up all deceptive marketing practices. Consumers must feel confident that they are receiving truthful information about the price and quality of goods they purchase," added Mr. Pierce.

FGL operates 217 corporate stores under the banners of Sport Chek, Sport Mart and Coast Mountain Sports, and 174 franchise stores under the banners of Sports Experts, Intersport, RnR, Atmosphere, Econosports and Tech Shop.

Consumers or competitors who suspect they have been affected by such deceptive business practices or who want information on the application of the Competition Act should contact the Bureau's Information Centre at 1-800-348-5358, or visit our Web site at www.cb-bc.gc.ca.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

Please see Backgrounder for more information.

For media enquiries, please contact:
Maureen McGrath
Senior Communications Advisor
Communications Branch
(613) 296-2187 (cell)

For general enquiries, please contact:
Information Centre
Competition Bureau
1-800-348-5358


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