Coles Supermarkets, an Australian supermarket chain owned by Wesfarmers, is now inside the hot, fiery oven. On Wednesday, the Australian Competition and Consumer Commission (ACCC) lodged a legal action before the Federal Courts versus the food retailer against its misleading claims over the bread that it sells in the store.
The ACCC alleged Coles has not been particularly honest or truthful when it said it freshly baked its bread from scratch in store, when in fact it's not. The bread it was found were already partially baked and frozen off-site, brought to Coles and "finished" at Coles stores which has in-house bakeries.
The ACCC said Coles highly and erroneously abused the words "Baked Today, Sold Today" as well as "Freshly Baked In-Store."
"It made consumers think that the bread was prepared from scratch in Coles' in-house bakeries on the day it was offered for sale," the ACCC said. Essentially, it should mean that the bread was entirely baked on the day it was offered for sale, the Australian competition regulator further noted.
"There are two important issues at stake," ACCC Chairman Rod Sims said. "First, consumers must be able to make informed purchasing decisions. Bread is an important grocery basket staple and customers need to be confident in claims made about food they buy."
"Second, and just as important, is the detrimental impact on the business of competitors. Misleading credence claims can undermine the level playing field and disadvantage other suppliers. In this case, those suppliers are the smaller, often franchised bakeries that compete with Coles."
ACCC's legal action against Coles was a result of a year-long investigation prompted by former Victorian premier Jeff Kennett, who bought Coles' Irish-made Cuisine Royale bread and muffins in 2012. However, he noticed that although labels claimed the bread was "baked today'' in-store, a small print revealed the item was made from foreign ingredients in Ireland.
Mr Kennett immediately sent ACCC a box of the said bread and muffins.
"What we found was that this [freshly-baked bread] was an important part of the way Coles was positioning themselves, and when big companies try position themselves in a certain was they have a bigger onus to make it right," Mr Sims said.
"We had a complaint from a person in Queensland who said the bread they bought was still cold or frozen in the middle, which is indicative of the fact it was baked, frozen and hadn't been finished."
Aside from financial penalties for breaching the Australian Consumer Law, the ACCC asks the court to oblige Coles to display signs in its stores and online highlighting the alleged misleading conduct.
Coles had said it will "vigorously defend itself" against the claims supplied by the Australian competition regulator.
The case is scheduled to be heard in the Federal Court in August.
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