01.Coles breached consumer law
In a victory for common sense and consumers, the Australian Federal Court has today ruled that Coles breached the Australian Consumer Law (ACL) by labelling its par-baked bread “fresh”.
The supermarket claimed its par-baked bread was “Baked Today, Sold Today” and “Freshly Baked In-Store”, when it was actually partially baked and frozen off site (in some cases overseas), transported to Coles stores and finished off there.
The Australian Competition and Consumer Commission (ACCC), which brought the case to court, successfully argued that labelling of the not-so-freshly-baked-bread was likely to mislead consumers into thinking the bread was prepared from scratch in Coles’ in-house bakeries on the day it was offered for sale.
Claims deemed misleading
“We believe consumers are likely to have been misled by Coles that the entire baking process, including preparation, occurred in-store, when in fact the bakery products were prepared and partially baked off-site, frozen, transported and then ‘finished’ in store,” ACCC chair Rod Sims says. “Indeed, the Cuisine Royale products were partially baked overseas.”
In his judgment, federal court judge Chief Justice Allsop said, “It is not the place of the court to provide an advice …as to how Coles might sell bread that has been par-baked from frozen product…A start would, however, be to make it tolerably clear to the public that the recent baking was the completion of a baking process that had taken place sometime before, off site, and that “freshly baked” actually meant the completion of the baking process of frozen product prepared and frozen off site by suppliers.”
The ACCC brought these proceedings because it was concerned that Coles’ ‘Baked Today’ and ‘Freshly Baked’ claims about par-baked bread were likely to mislead consumers,” Sims said. “These claims also placed independently-owned and franchised bakeries that freshly bake bread from scratch each day at a competitive disadvantage.”
“When larger businesses present their products as having a particular feature when they don’t, it can undermine the unique selling point that small businesses who do offer that feature depend upon to compete. Claims of this kind are a current enforcement priority area for the ACCC,” the ACCC said in its statement.
Coles faces fines of up to $1.1m per breach
The court found that Coles breached three sections of the ACL. The supermarket giant could face fines of up to $1.1m per breach.
This victory is the latest chapter in the ACCC's recent crackdown on Coles - Australia's consumer watchdog recently took Coles to court over alleged unconscionable conduct towards its suppliers, after a CHOICE investigation published in 2012 revealed the supermarket was charging suppliers a rebate to use an online "distribution portal" the supermarket had set up.