The Commerce Commission is reminding businesses which apply a surcharge on public holidays that they must not mislead consumers.

Some businesses opt to increase prices by 15 per cent on public holidays to meet the increased costs of paying staff more.

This follows a warning to a company that is a major provider of food and alcohol at Wellington's Westpac Stadium.

Spotless Services (NZ) Limited was warned by the Commerce Commission that signs displayed on Waitangi Day at the New Zealand International Sevens tournament were at risk of breaching the Fair Trading Act.

On those days, Spotless Services had signage in the public concourse area of the Westpac Stadium which stated ‘Please Note 15 per cent Surcharge (Due to Holidays Act)'.

A Commerce Commission investigation found that Spotless Services recovered significantly more from the surcharge than the actual cost of fulfilling its obligations under the Holidays Act 2003, as many of the people serving food and alcohol at the tournament on Waitangi Day were either part of volunteer groups or casual staff and were not covered by the Holidays Act.

'The Commerce Commission has no role to play in businesses' decisions whether to apply a surcharge on a public holiday,” says Commerce Commission general manager enforcement Kate Morrison.

'New Zealand businesses are free to determine the retail price for goods and services and they do not have to justify their prices to customers.

'However, if a reason for a price is given, to avoid the risk of breaching the Fair Trading Act, that reason needs to be accurate and not misleading.

'Many businesses decide not to apply a surcharge on a public holiday, but choose to absorb the extra wage costs as a cost of doing business.

'However, if businesses give the public holiday as a reason for applying a surcharge to avoid the potential of misleading consumers, that surcharge should accurately reflect their costs of opening.

'The Holidays Act has been in place now for seven years and most businesses should be able to make an estimation so that any surcharge reflects their business cost for opening on a public holiday.”

Tauranga Chamber of Commerce chief executive Max Mason agrees and says it is only fair the businesses up the price to cover increased labour costs on public holidays.

'I think that business have a right to charge a bit extra, especially if the cost are incurred because of employment legislation,” says Max.

'On the other hand a business has to make a judgement about how much the market will bear without having customers baulk at the additional costs.”