Coles Supermarkets Australia Pty Ltd has been fined $2.5 million for misleading consumers by promoting its bread products as being “Baked Today, Sold Today” and “Freshly Baked In-Store”.
In proceedings brought to the Federal Court by the Australian Competition and Consumer Commission (ACCC), the Court found Coles guilty of making false or misleading representations and engaging in misleading conduct by suggesting their bread was baked in store. The products were found to be partially baked off site by suppliers and then transported to the store, where it was ultimately “finished” prior to sale.
The ACCC said this conduct was part of a nationwide campaign, promoted in 637 Coles supermarkets.
“The contravening conduct in this case is substantial and serious,” Chief Justice Allsop said.
“Notwithstanding the absence of any specific evidence as to loss or damage by a consumer or a competitor, it is clear that the significant potential to mislead or deceive and thus to damage competitors, the duration of the conduct, and the fact that the goods in relation to which the impugned phrases were used were “consumer staples” indicate that the objective seriousness of the offending conduct was considerable.”
His Honour said Coles had breached Australian Consumer Law (ACL) with the intention of “improving its market share vis-à-vis its competitors, being bakeries such as Bakers Delight.”
ACCC Chairman Rod Sims said the penalty shows companies that “broad phrases in promotions” should not be used when promoting products.
“As the Chief Justice pointed out, it is important that sellers in the market recognise that consumers are entitled to reliable, truthful and accurate information,” Mr Sims said.
“The ACCC took this action because it was concerned that Coles’ “Baked Today, Sold Today” and “Freshly Baked In-Store” claims about its par baked bread were likely to mislead consumers. The conduct also placed independently-owned and franchised bakeries that entirely bake bread from scratch each day at a competitive disadvantage.”