An investigation by the Department of Consumer Affairs has found that Whole Food's New York City stores have been overstating the weights of pre-packaged products — including meats, dairy and baked goods — resulting in customers being overcharged, the agency said Wednesday.
The department said it will expand its investigation into the chain to examine the extent of its overcharging for pre-packaged foods, based on its initial findings.
The DCA tested 80 different pre-packaged products and found that all of them had mislabeled weights. On top of that, 89 percent of the packages tested didn't meet the federal standard for the maximum amount that an individual package can deviate from its actual weight, as set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to nearly $15 more for a package of coconut shrimp.
“Our inspectors tell me this is the worst case of mislabeling they have seen in their careers," DCA Commissioner Julie Menin said.
The findings point to a "systematic problem" with how the product packages at Whole Foods are weighed and labeled, the agency said. It said packages are routinely not weighed or are inaccurately weighed. Some items had all been labeled with the same weight, despite the fact that it would be practically impossible for the individual packages of the items to weigh the same amount. These products included nuts, berries, vegetables and seafood. In some cases, the labeling issue was found with the same exact products at multiple stores throughout NYC.
In one case, the DCA inspected eight packages of vegetable platters that were priced at $20 per package. They found that customers who purchased the platters were overcharged $2.50 on average. Whole Foods made a $20 profit on the eight packages, the DCA said.
In another case, the DCA inspected eight packages of chicken tenders, which were priced at $9.99 per pound. Consumers would have been overcharged $4.13 on average -- a profit of $33.04 for Whole Foods for those eight packages. One package was overpriced by $4.85, the DCA said.
A third inspection of four packages of berries, priced at $8.58 per package, found that customers would have been overcharged by $1.15 on average. That's a $4.60 profit for the four packages. One package was overpriced by $1.84, the DCA said.
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“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,” Menin said. "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 DCA regularly inspects all of the city’s supermarkets for scanner and scale accuracy, pricing, and charging tax on non-taxable items. It began its inspections of Whole Foods' weighing and labeling practices last fall. It revisited several stores in the winter and found that the products continued to be mislabeled. The expanded investigation announced by the agency will further evaluate the company's compliance with city and state laws.
In a statement to NBC New York, Whole Foods spokesman Michael Sinatra said, "We disagree with the DCA's overreaching allegations." He said Whole Foods cooperated fully with the department until it made "grossly excessive monetary demands" to settle the dispute.
"Despite our requests to the DCA, they have not provided evidence to back up their demands nor have they requested any additional information from us, but instead have taken this to the media to coerce us," Sinatra said. "Our customers are our number one stakeholder and we highly value their trust in us."
Sinatra said it has always been Whole Foods' policy to fully refund any items found to have been incorrectly weighed or priced, and that the company "has never intentionally used deceptive practices to incorrectly charge customers."
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, according to the DCA. The potential number of violations that Whole Foods faces for all pre-packaged goods in the NYC stores is in the thousands.
An investigation in California, which began in 2012, also found pricing irregularities in the state's Whole Foods stores. A civil consumer protection case on behalf of Californians was brought by city attorneys for Santa Monica, Los Angeles and San Diego. The case resulted in Whole Foods paying close to $800,000 in penalties. The company also began a stringent in-house pricing accuracy effort, which included a statewide compliance coordinator and random audits.
There are nine Whole Foods stores in New York City and the company reportedly plans to open a new location in Harlem. It also recently announced plans to open a lower-priced chain of stores called 365 by Whole Foods Market, which it says will offer "a simple way to shop for healthy, high-quality food at great prices."
