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Coles receives $2.5 million fine over misleading bread promotion

Coles Supermarkets has been slapped with $2.5 million in penalties by the Federal Court over its 2014 promotion of par bake bread as being freshly baked in-store and baked today.

But independent groups Master Grocers Australia and the Baking Association of Australia described the fine as “nothing” to Coles and a “drop in the ocean”.

The Court ordered Coles to pay the penalties for making false or misleading representations and engaging in misleading conduct, in proceedings brought by the Australian Competition and Consumer Commission.

The products were promoted as “Baked Today, Sold Today” and in some cases “Freshly Baked In-Store”, when they were in fact partially baked and frozen off site by a supplier, transported and ‘finished’ at in-store bakeries within Coles supermarkets.

In imposing these penalties, Chief Justice Allsop said: “The contravening conduct in this case is substantial and serious. 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 also noted that: “The evidence before the Court showed that Coles had engaged in the campaign with the clear purpose of improving its market share vis-à-vis its competitors.”

ACCC Chairman Rod Sims said the penalty sends a strong message to companies that they should not use broad phrases in promotions that are deliberately chosen to sell products to consumers, but which are likely to mislead consumers.

Coles’ conduct was part of a nationwide campaign that was promoted in 637 Coles supermarkets for par baked products over a three year period, the ACCC added.

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