Coles pays infringement notices for alleged misleading country of origin claims

1 July 2013

Coles Supermarkets Australia Pty Ltd (Coles) has paid six infringement notices totaling $61,200 for alleged misleading representations about the country of origin of fresh produce made in five of its stores between March 2013 and May 2013. The stores were located across Queensland, New South Wales, Western Australia and the Australian Capital Territory.

The Australian Competition and Consumer Commission took action following a complaint that Coles had displayed some imported navel oranges and kiwi fruit underneath price boards reading ‘Helping Australia Grow’ with the triangular ‘Australian Grown’ symbol. The ACCC surveyed a number of Coles stores and found that the signage was also being used in other stores to advertise imported asparagus and almonds.

The ACCC alleges that this signage gave the overall impression that the imported produce was Australian grown, when it was not. The overseas country of origin was correctly identified either by stickers on the produce itself, on its packaging or under the display bin.  However, the ACCC considered that the relatively small sized stickers or statements were not sufficient to correct the overwhelming impression of the ‘Helping Australia Grow’ campaign imagery that was associated with the sale of the product.

“Consumers should be able to rely on the accuracy of claims about food, particularly when they are prepared to pay a premium for products made in Australia. Misleading country of origin claims can also have a significant impact on the competitive process and hurt the local economy,” ACCC Chairman Rod Sims said.

“While this does not appear to be a case of widespread or systemic conduct, ‘Helping Australia Grow’ is a significant national campaign driven hard by Coles to advertise its fresh produce. This is a lesson to all retailers that they need to take care when undertaking significant advertising campaigns to ensure consumers are not misled by those campaigns,” Mr Sims said.

The ACCC is prioritising its work in relation to credence claims, particularly those in the food industry with the potential to have a significant impact on consumers and competitors.

Coles advised the ACCC that the conduct arose out of the relocation of stock within stores without updating the promotional imagery on the price boards. The ACCC nevertheless considered action was necessary given the importance consumers place on representations of this kind, and the importance of strong compliance processes when choosing to make such claims in the context of a widespread campaign.

The payment of infringement notice penalties is not an admission of a contravention of the Competition and Consumer Act 2010. The ACCC can issue an infringement notice where it has reasonable grounds to believe a trader has contravened certain consumer protection laws.

Infringement notices.

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