The legal action against Coles Supermarkets Australia Pty Ltd (Coles) comes after the ACCC took action over 'misleading' claims that the chain had been making on its ‘Cuisine Royale’ and ‘Coles Bakery’ branded bread products in store.
According to the ACCC, Coles is alleged to have committed 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.
Products were then promoted as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’ at Coles stores with in-house bakeries, the ACCC said - adding that this was likely to mislead consumers into thinking that the bread was prepared from scratch in Coles’ in-house bakeries on the day it was offered for sale and that it was entirely baked on the day it was offered for sale.
“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. Indeed, the Cuisine Royale products were partially baked overseas,” said ACCC Chairman Rod Sims.
The legal action could result in fines for Coles of up to $1.1 million per offence under Australian Consumer Law.
Misleading and deceptive
The ACCC said it is concerned that Coles’ lack of distinction in its promotional representations between bread products that were freshly prepared from scratch and part baked products is "misleading to consumers and places competing bakeries that do freshly bake from scratch at a competitive disadvantage."
“There are two important issues at stake," explained Sims. "First, consumers must be able to make informed purchasing decisions. Bread is an important grocery basket staple and customers need to be confident in claims made about food they buy.”
“Second and just as important, is the detrimental impact on the businesses of competitors."
"Misleading credence claims can undermine the level playing field and disadvantage other suppliers. In this case those suppliers are the smaller, often franchised bakeries that compete with Coles,” he added.
Coles operates 749 supermarkets in Australia, with at least 625 of these supermarkets containing an in-store bakery, the ACCC added.
The ACCC said that bringing the legal action, which has been filed in the Melbourne Federal Court's Fast Track List, is part of its publicly declared enforcement priority of investigating credence claims, particularly in the food industry, with the potential to significantly impact consumers and competitors.
The first Scheduling Conference is listed for 13 August 2013 at 9.30am.