NAD Refers Comparative Pricing Claims made by “Total Wine” to FTC for Further Review After Advertiser Declines to Participate in NAD Proceeding

New York, NY – Jan. 27, 2017 – Comparative pricing claims made by Total Wine & More have been referred to the Federal Trade Commission (FTC) for further review after the company declined to participate in a proceeding before the National Advertising Division (NAD).

NAD is an investigative unit of the advertising industry system of self-regulation. It is administered by the Council of Better Business Bureaus.

The claims at issue were challenged by BevMo! Holdings, LLC and included:

  • “Don’t Paymo at BevMo”
  • “Total Wine’s “Everyday Low Prices Crush BevMo’s Sale Prices.”
  • “Save over [amount varies by advertisement] on Average Per Item!”

BevMo! contended that Total Wine makes unsupported price comparison claims between the two companies’ beer, wine, and spirits using outdated or stale BevMo! prices, and prices from BevMo! stores that are well outside the geographically relevant market area.

BevMo! Further contended that Total Wine’s use of the phrase “everyday low prices crush BevMo’s sale prices” is a broad, unsubstantiated claim that Total Wine enjoys a price advantage on every item sold by both retailers. According to BevMo!, the distribution of Total Wines’ print flyers are sufficiently national in scope and Total Wine’s advertising strategy of making broad comparative pricing claims against a competitor is  national in character for NAD to exercise jurisdiction.

The headline of each of the challenged flyers reads: “Don’t Paymo at BevMo,” and states, “Who Has Time To Comparison Shop? WE DO!”

In response to NAD’s inquiry, the advertiser advised NAD that it declined to participate in this self-regulatory proceeding and submit a substantive response.

In light of the advertiser’s decision NAD will, pursuant to Section 2.10 of the NAD/NARB Procedures, refer this matter to the FTC for possible law enforcement action.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.

 

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