Bait ad rap “bullshit” says Gerry Harvey

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Harvey Norman chief executive Gerry Harvey has drawn a line in the sand in the company's long-running fight with the ACCC over alleged “bait advertising” dismissing the complaint as “bullshit”.

Describing the complaint as beyond belief, Harvey accused ACCC chief Alan Fels of “running an agenda”, and vowed to fight the allegations as far as the legal system would allow.

The ACCC said it had instituted proceedings against three companies in the Harvey Norman group, as well as two corporate executives and 15 Harvey Norman franchisees.

The action alleges Harvey Norman engaged in “bait advertising” in a campaign it conducted in 2000 where it offered the Quicken QuickBooks software package for $199, together with a package of bundled software worth $900. The ACCC says Harvey Norman and its executives were aware that quantities of the bonus software were insufficient to meet consumer demand, in contravention of sections of the Trade Practices Act.

Harvey Norman computers and communication general manager John Slack-Smith and fellow C&C executive Paul D'Ambra were named in the action.

An enraged Harvey said it had been impossible to predict the extraordinary demand that the offer received – as strong demand had been generated by last minute buying around the time of the introduction of the Goods and Services Tax.

“How they can get that 'bait advertising' bullshit going, I don't know,” Harvey said.

“You've never seen anything in your life – and I haven't in 40 years in retail – like what happened (to accounting software demand) around the time of the GST's introduction,” he said.

Harvey said in the 12 months before the offer, the Harvey Norman stores had sold about 1,000 copies of the Quicken QuickBooks program. In readiness for the special promotion, the company's executives had arranged enough stock to sell 2,000 copies of the program during the one month promotional period.

The company was caught out, he said, by “extraordinary” demand for 20,000 copies of the program, leaving it considerably short of stock.

Harvey says it would be ridiculous to suggest that the company's executives could have foreseen the demand. He claims that six months after being caught short, Harvey Norman had run another campaign offering the Quicken QuickBooks package for $149 – and only sold 500 copies.

“This is beyond belief. No-one could guess (that kind of demand), They're asking someone here to be a genius,” he said.

The ACCC investigation and actions against the company over the QuickBooks/GST incident had been running for two and a half years, with Harvey Norman having already taken its own legal action to keep the case out of court.

The ACCC, however, announced on Tuesday that it had been successful in getting the case in front of the Federal Court in Melbourne on December 13.

Harvey, who has a well documented dislike for the practices of the ACCC, has said his company would continue to take the fight to the commission.

“Most people would just roll-over. They'd just pay the ACCC (fines) because they don't want the bad publicity,” Harvey said.

“We're not going to do that.”

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