SUPERMARKET giant Coles has vowed to "vigorously defend" allegations some of its "freshly baked" bread is partially baked and frozen overseas.
The Australian Competition and Consumer Commission launched proceedings against Coles in the Federal Court on Wednesday.
It is alleging Coles engaged in false, misleading and deceptive conduct by selling bread that was promoted as being "Baked today, sold today" and "Freshly baked in-store".
The ACCC alleges the bread was partially baked and frozen in Ireland, transported to Coles stores and "finished" at in-store bakeries.
Labels and signage promoting the bread were likely to mislead consumers into thinking it was prepared from scratch in Coles' in-house bakeries on the day it was offered for sale and that it was entirely baked on the day it was offered for sale, the ACCC alleges.
Coles uses these same terms to promote bread it makes from scratch at in-store bakeries, the ACCC said.
For this reason it is concerned Coles' lack of distinction in its promotional representations, between bread products that are prepared from scratch and part-baked, is misleading and places competing bakeries that do bake from scratch at a competitive disadvantage.
ACCC chairman Rod Sims said the court action centred around two major issues.
"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," Mr Sims said.
"We believe consumers are likely to have been misled by Coles that the entire baking process, including preparation, occurred in-store, when, in fact, the bakery products were prepared and partially baked off site, frozen, transported and then 'finished' in store. Indeed, the Cuisine Royale products were partially baked overseas.
"Second, and just as important, is the detrimental impact on the businesses 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."
Mr Sims said the Coles action was part of the ACCC's declared enforcement priority of investigating credence claims, particularly in the food industry, with the potential to significantly impact consumers and competitors.
In a statement Coles said it had only "just become aware of the ACCC legal action" and would "fully examine the ACCC statement before making any further comment".
The ACCC's Compliance and Enforcement Policy released in February states that credence claims, particularly in the food industry, with the potential to have a significant impact on consumers or the competitive process, continues to be one of the ACCC's enforcement priorities. Recent outcomes in matters pursued by the ACCC include:
- Payment of two infringement notices this month by MOIInternational in respect of misleading olive oil claims.
- Penalties of $375,000 ordered by the Federal Court in December against Pepe's Ducks for false, misleading and deceptive conduct in relation to the promotion and supply of its duck meat products.
- Penalties of $50,000 ordered by the Federal Court in September against Rosie's Eggs, in relation to the substitution of cage eggs for free range eggs.
- Penalties of $50,000 imposed by the Federal Court against Peninsula Bulk Meats in February last year after it admitted that it had engaged in misleading and deceptive conduct by falsely claiming that the meat it offered for sale was sourced from King Island.
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