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A ‘fresh’ reminder on misleading representations

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By Marianne Marchesi, Associate, MST Lawyers

In proceedings brought by the Australian Competition and Consumer Commission (“the ACCC”), the Federal Court has found that Coles Supermarkets Australia Pty Ltd (“Coles”) engaged in misleading and deceptive conduct by advertising that its ‘Cuisine Royale’ and ‘Coles Bakery’ bread was “Baked Today, Sold Today”, “Freshly Baked In-Store” and “Baked Fresh”.

In fact, the bread products were partially baked and frozen by an external supplier and subsequently ‘baked off’ at a Coles supermarket.

Chairman of the ACCC, Rod Sims, stated that proceedings were brought amidst a concern that such claims might mislead consumers and that the claims “also placed independently-owned and franchised bakeries that freshly bake bread from scratch each day at a competitive disadvantage”.

The ACCC argued that Coles’ marketing of the bread products implied to consumers that they were either baked from scratch or entirely baked on the day they were offered for sale and that such representations were misleading.

The law

Section 18(1) of the Australian Consumer Law states that:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

In considering whether something is likely to mislead or deceive, a court will consider the tendency of the conduct to lead into error and whether an ‘ordinary and reasonable’ person would be so misled.

The findings

The judge commented that “to many reasonable and ordinary people, the phrase ‘baked today, sold today’…would convey that the baking process, not some heating or baking process, has taken place today”. Further, the judge noted that the words “fresh” only sought to reinforce this representation.

Accordingly, it was found that Coles had breached the ACL by engaging in misleading or deceptive conduct, with a hearing to determine relief to be held at a later date. The ACCC is seeking penalties, declarations, injunctions, costs and other orders.

What should you do?

The ACCC has stated that “credence claims” of this kind (i.e. claims that consumers would have difficulty testing the accuracy of) are a current enforcement priority area.

For those operating in trade or commerce, it would be prudent to:

  • review your current marketing material
  • review any claims made on packaging/labels/signs
  • ensure your staff are educated on misleading conduct laws
  • if in doubt, seek legal advice

For further information on misleading or deceptive conduct, please contact our Corporate and Commercial Team by email corporate@mst.com.au or telephone +61 3 8540 0200.