The Federal Court has ordered Coles to pay penalties equating to $2.5 million over claims that its bread was “Baked Today, Sold Today”, when it was pre-baked off site.
The supermarket giant was taken to court by the Australian Competition and Consumer Commission, which said that the erroneous claim could affect its competition.
“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, being bakeries such as Bakers Delight. It set out to do so by engaging in the conduct that, in fact, breached the Australian Consumer Law,” Chief Justice James Allsop noted in his judgement.
Allsop had previously found the claims misleading and banned Coles from making them, but the latest task was to judge just how far Coles had breached the Trade Practices Act.
“The contravening conduct in this case is substantial and serious,” Allsop said.
“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.”
ACCC chairman Rod Sims said the judgement and heavy penalty would serve as a warning to marketing departments all around the country to not make vague pronouncements about their products.
“This 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,” Sims said.
“As the Chief Justice pointed out, it is important that sellers in the market recognise that consumers are entitled to reliable, truthful and accurate information”
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