Coles Supermarkets Australia Pty Ltd - s.87B undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Coles Supermarkets Australia Pty Ltd (Coles) following an investigation into a video and cartoon ‘Our Coles Brand Milk Story’, which was published on social media.

The video and cartoon ran from 7 February 2013 to 5 May 2013 on a variety of platforms including YouTube, Coles’ website and Facebook page, and was promoted in links from Twitter and other social media.

The ACCC, which commenced the investigation following complaints from dairy farmer organisations, was concerned that Coles was likely to have misled consumers about the impact of its 26 January 2011 retail milk price reduction on the average price paid to dairy farmers supplying milk to processors in 2011-12 (the farmgate price). The ACCC was also concerned that Coles was likely to have misled consumers about the margins obtained by both Coles and processors on Coles brand milk, and also about the impact of the retail milk price reduction on Australian milk production more generally.

Coles has admitted that its making of these representations would be likely to have contravened section 18 of the Australian Consumer Law, which prohibits misleading or deceptive conduct. Coles has worked with the ACCC to resolve these concerns, and has now committed to:

• publish corrective advertisements on the same online platforms that the original representations were published;
• for a period of three years, not make misleading or deceptive representations in relation to the impact of reductions in the retail price for Coles brand milk on the farmgate milk price, Coles’ or processor margins on Coles brand milk, and/ or Australian milk production generally; and
• review its Australian Consumer Law compliance program as it relates to the application of section 18 of the Australian Consumer Law to advertising and promotional strategies relating to Coles brand milk, including social media, and to identify specific compliance processes and training for employees of the Coles Media Relations Team to ensure the conduct of concern to the ACCC does not occur again.