Coles in Federal Court over alleged false, misleading and deceptive bakery claims

Today the Australian Competition and Consumer Commission (ACCC) initiated proceedings in the Federal Court, alleging Coles Supermarkets Australia Pty Ltd (Coles) engaged in false, misleading and deceptive conduct. The lawsuit pertains to the supply of several ‘Cuisine Royale’ and ‘Coles Bakery’ branded bread products which are partially baked and frozen off site and transported and ‘finished’ in-store. Coles then promotes the bread as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’.

According to the ACCC media release, “the ACCC alleges that labels on these ‘par baked’ products stating ‘Baked Today, Sold Today’ and in some cases ‘Freshly Baked In-Store’, and nearby prominent signs stating ‘Freshly Baked’ or ‘Baked Fresh’, were 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.”

Coles uses the same words and signage to promote bread that has been made from scratch in the in-store bakeries. The ACCC is concerned that using the same promotional representations for bread that is freshly prepared from scratch and bread that is par baked “is misleading to consumers and places competing bakeries that do freshly bake from scratch at a competitive disadvantage.”

ACCC Chairman Rod Sims commented, “there are two important issues at stake. First, consumers must be able to make informed purchasing decisions.”

“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,” Mr Sims said.

The ACCC is pursuing declarations, injunctions, pecuniary penalties and orders that Coles review its compliance program and publish corrective notices on its website and in Coles supermarkets featuring in-store bakeries, and costs.

The case has been placed on the Melbourne Federal Court's Fast Track List. The initial Scheduling Conference is listed for 13 August 2013 at 9.30am.

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