Retail giant Whole Foods Markets Inc has agreed to pay an $800,000 penalty for price gouging after a yearlong investigation by California State and local inspectors found that the stores had been overcharging customers there. Whole Foods has 74 stores California alone. $630,000 of the funds will be used to cover civil penalties to attorneys for Los Angeles, Santa Monica and San Diego (who brought the case). The company also agreed to a 5-year injunction that requires it to maintain “accurate pricing, increased monitoring of its pricing practices and submit to random audits.”
According to a statement from Los Angeles City Attorney Mike Feuer, problems included failing to subtract at checkout the weight of salad bar containers, giving less weight than shown on labels for packaged items sold by the pound and selling items such as kebabs and deli foods by the piece rather than by the pound as required by law.”
This is not the first time Austin TX-based organic food chain has been at odds with the State of California. On March 29, 2008, (then) Attorney General Jerry Brown filed a major lawsuit against them (as well as other personal care and household cleaning product companies for “allegedly selling ‘natural’ products including body washes and gels, etc., that tested high for the cancer-causing chemical 1,4 Dioxane and failing to list it on their label of ingredients as mandated under California’s Proposition 65. Each violation carried civil penalties as high as $2,500 per day.
At the time, Whole Foods spokesperson Libba Letton issued a statement saying that the company did not believe "these products represent a health risk or are in excess of Proposition 65 Safe Harbor levels for 1,4-dioxane."
Although the Company has agreed to “cooperate” with authorities regarding the overcharging allegations, its “pricing is generally 98% accurate.” In addition to the markets in California, Whole Foods operates large numbers of stores throughout the US, as well as in Canada and the United Kingdom.