An Australian supermarket chain has been fined AU$2.5 million (€1.8m) for passing off bread as “fresh, baked today and sold today” which in fact had first been par-baked in Ireland, Denmark and Germany months earlier.
The court action against the Coles chain began more than two years ago when the former premier of the state of Victoria, Jeff Kennett, discovered his "freshly baked" Cuisine Royale breads and muffins were made in Ireland.
Mr Kennett reported the company to the Australian Competition and Consumer Commission (ACCC).
Investigators from the ACCC found the bread had been made on the other side of the world before being frozen and transported to Australia. It launched proceedings against Coles a year ago, accusing the company of misleading consumers.
The chain, which controls around a third of Australia’s supermarket business, was found to have breached three sections of consumer law and fined AU$2.5 million.
Chief justice James Allsop said Coles’s conduct was “substantial and serious”.
“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,” he said.
ACCC chairman Rod Sims, to whom Mr Kennett posted the baked goods which offended him two years ago, said the size of the penalty is important.
“It 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,” he said.
In a statement, Coles said it will do a “better job at explaining” how its products are baked.
“In talking to customers about the ‘par-baked’ bread range we certainly never set out to deliberately mislead anybody but we completely accept that we could have done a better job in explaining how the products are baked.”
Despite having cost the company millions of dollars, Mr Kennett now works for Coles as independent arbiter in its disputes with suppliers.
Last December Coles agreed to pay AU$10 million in penalties and review contracts with hundreds of suppliers after admitting to 15 instances of unconscionable conduct against eight suppliers. It had initially denied the allegations.
Coles operates around 750 supermarkets in Australia, with more than 600 of these having an in-store bakery.
