Coles fined $2.5m for misleading bread promotion

Coles has been slapped with a $2.5 million fine for promoting its par-baked, store-finished bread as ‘Baked Today, Sold Today’ and ‘Freshly Baked In-Store’. The Federal Court ordered the supermarket to pay penalties for misleading conduct after the Australian Competition and Consumer Commission brought proceedings against Coles.

Despite being promoted as freshly baked bread, the products in question were in fact partially baked and frozen offsite by a supplier, then transported and ‘finished’ at in-store bakeries within Coles supermarkets.

“The contravening conduct in this case is 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,” said Chief Justice Allsop, who imposed the penalties.

“The evidence before the court showed that Coles had engaged in the campaign with the clear purpose of improving its market share vis-à-vis its competitors, being bakeries such as Bakers Delight ... It set out to do so by engaging in the conduct that, in fact, breached the Australian Consumer Law.”

Coles’s conduct placed companies that genuinely do bake bread in store each day at a competitive disadvantage, said ACCC Chairman Rod Sims.