Australia's Coles supermarket chain faces fines of up to $3.3 million (€ 2.27million) for passing off bread as "fresh, baked today and sold today" when in fact it had been first baked in Ireland, Denmark and Germany months earlier.
Investigators from the Australian Competition and Consumer Commission (ACCC) said the bread had in fact been made on the other side of the world before being frozen and transported to Australia.
ACCC launched proceedings against Coles a year ago, accusing the company of misleading consumers.
The chain, which controls 33.5 per cent of Australia’s supermarket business, was today found to have breached three sections of consumer law. It faces fines of up to $1.1 million per breach.
In his judgment, Chief Justice James 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 case was first exposed when the former premier of Victoria Jeff Kennett discovered his “freshly baked” Cuisine Royale breads and muffins were made in Ireland.
He posted the offending baked goods to ACCC chairman, Rod Sims, and regularly spoke about the issue on talkback radio.
Mr Kennett welcomed today's decision. "The ramification is wider than just to Coles – it's to every advertising agency, every marketer, every promoter of goods and services. They must accurately portray what they're offering or be prepared to pay a penalty," he said.
In a statement following the ruling, Coles said it did not set out to “deliberately mislead anybody” and will do a “better job at explaining” how their 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. We are already well advanced in changing product packaging and other information.”
Mr Sims said Coles misled the public and disadvantaged small, independent bakeries.
“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,” he said.
“These claims also placed independently-owned and franchised bakeries that freshly bake bread from scratch each day at a competitive disadvantage.”
Coles operates around 750 supermarkets in Australia, with more than 600 of these having an in-store bakery.
