ACCC: institutes proceedings against Coles’ «fresh» bread

Adelaide / AU. (accc) The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Coles Supermarkets Australia Pty Limited. The ACCC is 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 products were then promoted as «Baked Today, Sold Today» and/or «Freshly Baked In-Store» at Coles stores with in-house bakeries.

The legal action covers various «Cuisine Royale» and «Coles Bakery» branded bread products. 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 also uses these same representations to promote bread that has been made from scratch in Coles´ in-store bakeries. The ACCC is concerned that Coles´ lack of distinction in its promotional representations between bread products that are freshly prepared from scratch and par baked products is misleading to consumers and places competing bakeries that do freshly bake from scratch at a competitive disadvantage.

ACCC Chairman Rod Sims: «There are two important issues at stake. 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».

«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».

«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», Sims said.

In the past few years, Coles has heavily promoted its in-store bakeries and introduced a number of «rustic» bread lines. Many of these artisan-like breads have been par baked and frozen before being finished off before sale, whereas many independent bakeries make their bread from scratch in the bakery on the day of sale.

Bringing this action is part of the ACCC´s publicly declared enforcement priority of investigating credence claims, particularly in the food industry, with the potential to significantly impact consumers and competitors.

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

The matter has been filed in the Melbourne Federal Court´s Fast Track List. The first Scheduling Conference is listed for 13 August 2013.