Coles given three-year ban after false bread claims

Posted by AFN Staff Writers on 29th September 2014
ACCC wins against Coles on bread
ACCC wins against Coles on bread

The Federal Court has banned Australian supermarket giant Coles from making claims that its bread products are ‘freshly baked’ or baked on the day for three years.

The judgement, which was handed down today by the Honourable Chief Justice James Allsop, ordered that Coles be restrained for a period of three years from the date of the order, whether by itself, its servants, agents or otherwise in connection with the supply or possible supply, or the promotion by any means, of bread products from making any representation on any packaging, signage, website or other promotional material that such products:

  • were entirely baked on the day on which they were offered for sale; or
  • were entirely baked in a Coles Bakery Store on the day on which they were offered for sale;
  • were baked from fresh dough,

when that is not the case.

Australian Food News reported in June 2013 that the Australian Competition and Consumer Commission (ACCC) had instituted proceedings in the Federal Court against supermarket group Coles, alleging false, misleading and deceptive conduct in the supply of bread that was partially baked and frozen off site, transported to Coles stores and ‘finished’ in-store.

The Court found that, from 1 July 2012, by supplying in Coles supermarkets which have an in-store bakery (Coles Bakery Stores) bakery products in packaging displaying the words “Baked Today, Sold Today”, Coles had represented to its customers that the products contained in the packaging were entirely baked on the day on which they were offered for sale. The Court found that these claims were made in circumstances where only some baking of certain products contained in that packaging had taken place on the day on which they were offered for sale.

Court finds Coles engaged in ‘misleading’ and ‘deceptive’ conduct

The Court found that Coles thereby:

  • engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive, in contravention of section 18 of the Competition and Consumer Act 2010  (Cth), Sch 2 (Australian Consumer Law)(ACL);
  • made a representation in trade or commerce, in connection with the supply or possible supply or promotion of the supply of goods that was false or misleading as to the history of the goods in contravention of section 29(1)(a) of the ACL; and
  • engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, the manufacturing process, and the characteristics of goods in contravention of section 33 of the ACL.

Coles ordered to prominently display corrective notices

The Court has also ordered that Coles, at its own expense, within 14 days of the court order and for a period of 90 days, display a corrective notice in a prominent location on counters, or another place if a counter not be available, clearly visible to customers at all times in each in-store bakery section of each Coles Bakery Store in Australia. The corrective notice is also to be published on Coles’ website homepage.

Chief Justice Allsop said that in the circumstances of this case, he did not think there was any necessity for compliance orders, which had been proposed by the ACCC.

“The publicity already received by Coles and the publicity likely to be received by the Corrective Notice to be displayed in stores and on the website will amply act as a discipline for the need for compliance,” Chief Justice Allsop said.

Coles has been ordered by the Court to pay the applicant’s costs of and incidental to the proceeding to the conclusion of the trial on liability save and except for the costs of and incidental to the applicant’s application for leave to inspect the documents produced under paragraph 4 of the Schedule to the subpoenas dated 2 December 2013 issued to Frozen Bakery Solutions Pty Ltd, Speedibake (a division of George Weston Foods Ltd) and Laurent Bakery Pty Ltd (which costs are subject to order 4 of the orders made by Mortimer J on 11 February 201.

The question of the pecuniary penalties that Coles may be ordered to pay to the Commonwealth of Australia in respect of each contravention of sections 29(1)(a) and 33 of the ACL, as well as such further or other orders as the Court thinks fit, be heard on a date to be fixed by the Court.