The Australian Competition and Consumer Commission (ACCC) has launched proceedings in the Federal Court against Coles.
The ACCC is alleging Coles has engaged in 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.
Coles also uses these same representations to promote bread that has been made from scratch in Coles’ in-store bakeries. A statement issued by the ACCC says it 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 said, "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 a statement issued by Coles, the supermarket expressed its intention to "vigorously defend the action brought against it by the ACCC.
"Coles has only just become aware of the ACCC legal action and will fully examine the ACCC statement before making any further comment," the statement reads.