Whole Foods Under Fire: Systemic Overcharging Alleged

Department of Consumer Affairs (DCA) Commissioner Julie Menin announced an ongoing investigation into Whole Foods after finding that the company’s New York City stores routinely overstated the weights of its pre-packaged products – including meats, dairy and baked goods – resulting in customers being overcharged.

DCA tested packages of 80 different types of pre-packaged products and found all of the products had packages with mislabeled weights.

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“89 percent of the packages tested did not meet the federal standard..”

Additionally, 89 percent of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight, which is set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.

“..found all of the products had packages with mislabeled weights”

DCA’s findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled. The snapshot suggests that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers. The overcharges were especially prevalent in packages that had been labeled with exactly the same weight when it would be practically impossible for all of the packages to weigh the same amount. These products included nuts and other snack products (flavored almonds, pecan panko and corn nuts), berries, vegetables, and seafood. In some cases, this issue was found for the same exact products at multiple stores.

Several examples of overcharges include:

• DCA inspected eight packages of vegetable platters, which were priced at $20/package. Consumers who purchased these packages would have been, on average, overcharged by $2.50-a profit of $20 for the eight packages. One package was overpriced by $6.15.
• DCA inspected eight packages of chicken tenders, which were priced at $9.99/pound. Consumers who purchased these packages would have been, on average, overcharged by $4.13-a profit of $33.04 for the eight packages. One package was overpriced by $4.85.
• DCA inspected four packages of berries, which were priced at $8.58/package. Consumers who purchased these packages would have been, on average, overcharged by $1.15-a profit of $4.60 for the four packages. One package was overpriced by $1.84.

“It is unacceptable that New Yorkers shopping for a summer BBQ or who grab something to eat from the self-service aisles at New York City’s Whole Foods stores have a good chance of being overcharged,” said DCA Commissioner Menin. “Our inspectors tell me this is the worst case of mislabeling they have seen in their careers, which DCA and New Yorkers will not tolerate. As a large chain grocery store, Whole Foods has the money and resources to ensure greater accuracy and to correct what appears to be a widespread problem-the city’s shoppers deserve to be correctly charged.”

DCA regularly inspects all of the city’s supermarkets for scanner and scale accuracy, pricing, and charging tax on non-taxable items. Last fall, DCA conducted in-depth inspections into how Whole Foods was weighing and labeling its pre-packaged foods and discovered troubling issues with their labeling of the weight of pre-packaged foods. This winter, DCA revisited several stores and found products continued to be mislabeled. DCA’s expanded investigation will further evaluate the company’s compliance with City and state laws. To date, DCA’s inspections have focused on the eight stores that were open during the time of inspections. There are currently nine Whole Foods stores in New York City and they reportedly have plans to open an additional location in Harlem. Nationally, the chain is rapidly expanding and also recently announced that it plans to open a lower-priced chain called 365 by Whole Foods Market.

The fine for falsely labeling a package is as much as $950 for the first violation and up to $1,700 for a subsequent violation. The potential number of violations that Whole Foods faces for all pre-packaged goods in the NYC stores is in the thousands.

California Investigation

An investigation in California, which began in 2012, also found pricing irregularities in the state’s Whole Foods stores. City Attorneys for Santa Monica, Los Angeles, and San Diego brought a civil consumer protection case on behalf of the people of the State of California.

As a result of that case, Whole Foods agreed to pay close to $800,000 in penalties and initiate a stringent in-house pricing accuracy effort that included a statewide compliance coordinator, a designated employee at each location for pricing accuracy, and random audits.

*Department of Consumer Affairs (NY)