SANTA CRUZ, Calif. -

Safeway Inc. has reached a settlement with the Santa Cruz County District Attorney's Office and several other California counties regarding issues of pricing. The food and drug retailer will have to pay $2.25 million in civil penalties, investigative costs and restitution.

A complaint filed by district attorneys in several counties alleged that Safeway engaged in false advertising and unfair competition. The prosecutors claimed that within at least the past four years, Safeway unlawfully charged consumers prices higher than Safeway's lowest advertised price, misrepresented the weight of Safeway-branded products and made false statements on in-store signage. The retail chain is accused of making statements on the signage that conveyed the impression certain Safeway produce was locally grown when it was actually sourced from other countries.

Safeway also was accused of failing to abide by provisions of a 2008 injunction requiring the company to initiate and maintain a program to minimize pricing discrepancies. Safeway was supposed to institute a price accuracy policy that required stores to give consumers an item for free if they are overcharged and the lowest price was $5 or less.

This latest civil suit was prosecuted by district attorneys in Santa Cruz, Marin, Alameda, Fresno, Napa, Sacramento, Solano, Sonoma and Ventura counties.