The Federal Court has today found that claims made by Coles Supermarkets Australia Pty Ltd (Coles) that its ‘Cuisine Royale’ and ‘Coles Bakery’ bread was ‘Baked Today, Sold Today’ and in some cases ‘Freshly Baked In-Store’ were false, misleading and deceptive, in proceedings brought by the Australian Competition and Consumer Commission.
These bread products were partially baked and frozen off site by a supplier (in the case of Cuisine Royale, this baking and freezing took place overseas), transported and ‘finished’ at in-store bakeries within Coles supermarkets.
These bread products were promoted at Coles’ supermarkets with in-house bakeries as ‘Baked Today, Sold Today’ and in some cases ‘Freshly Baked In-Store’. In addition, some of these products were offered for sale at Coles’ supermarkets close to prominent signs which stated ‘Freshly Baked’ or ‘Baked Fresh’.
The Court found that the “Baked Today, Sold Today”, “Freshly Baked” and “Baked Fresh” claims made by Coles amounted to a misleading representation that the par baked bread products had been baked on the day of sale or baked in a fresh process using fresh not frozen product.
In his judgment, Chief Justice Allsop said “It is not the place of the court to provide an advice …as to how Coles might sell bread that has been par-baked from frozen product…A start would, however, be to make it tolerably clear to the public that the recent baking was the completion of a baking process that had taken place sometime before, off site, and that “freshly baked” actually meant the completion of the baking process of frozen product prepared and frozen off site by suppliers.”
“The ACCC brought these proceedings because it was concerned that Coles’ ‘Baked Today’ and ‘Freshly Baked’ claims about par baked bread were likely to mislead consumers,” ACCC Chairman Rod Sims said.
“These claims also placed independently-owned and franchised bakeries that freshly bake bread from scratch each day at a competitive disadvantage.”
“Today’s decision confirms that Coles misled consumers about the baking of these bread products. Consumers should be able to rely on the accuracy of credence claims made by businesses like Coles to promote their products, especially where those claims are used to compete with smaller businesses which are genuinely offering a differentiated product,” Mr Sims said.
Credence claims are representations of a premium or special characteristic that are difficult for a consumer to test the accuracy for themselves. They are powerful marketing tools that can mislead consumers if improperly used and have the potential to adversely impact the competitive process and small businesses.
In particular, when larger businesses present their products as having a particular feature when they don’t, it can undermine the unique selling point that small businesses who do offer that feature depend upon to compete. Claims of this kind are a current enforcement priority area for the ACCC.
A hearing will be held in the Federal Court in Melbourne at a later date to determine the relief that will be ordered. The ACCC is seeking penalties, declarations, injunctions, costs and other orders.