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Whole Foods Reaches $800K Settlement In Overcharging Case

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Grocery chain Whole Foods Market, Inc. (WFM: Quote) on Tuesday reached an $800,000 settlement with City Attorney's of Los Angeles Santa Monica and San Diego in a statewide pricing inaccuracy case. The company has agreed to pay the amount and to adhere to sweeping court injunction.

"We're taking action to assure consumers get what they pay for. No consumer should ever be overcharged by their local market," Los Angeles City Attorney Mike Feuer said in a statement.

Austin, Texas-based Whole Foods reached a settlement after investigations by state and county Weights and Measures inspector's unearthed widespread pricing violations throughout the state of California.

Whole Foods was seen to be charging more than the advertised price for a wide variety of food items.

It was charged of failing to deduct the weight of containers at the salad bar and hot bar, selling items by piece rather than by the pound, and also selling packaged items with lesser weight than stated on the label.

The settlement will see Whole Foods paying $798,394 in civil penalties and costs, of which the Los Angeles City Attorney's Office will receive $210,000.

The total settlement includes $630,000 in civil penalties, $100,000 paid to a statewide consumer protection trust fund, and $68,394 in investigative costs

As part of the settlement, Whole Foods has also agreed to appoint two "state coordinators" to oversee pricing accuracy at Whole Foods stores throughout California, as well as charge accurate prices and provide the advertised weight on all items.

Further, it has agreed to designate an employee at every store in the state who will be responsible to assure pricing accuracy throughout the store. It will also conduct random audits at each of its stores, four times per year, to check compliance to pricing and weight issues.

The settlement covers all 74 Whole Foods stores in the state of California, including ten in the city of Los Angeles.

WFM closed Tuesday's regular trading session at $38.95, down $0.29 or 0.74% on a volume of 7.02 million shares.

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by RTT Staff Writer

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