Case Update: Are you misleading consumers?

June, 2014
If you are making premium claims to promote your products and services, the Federal Court has reinforced that these claims must be accurate and capable of being substantiated, otherwise you risk severe penalties for misleading consumers.

Yesterday, the Federal Court found in proceedings bought by the Australian Competition and Consumer Commission (ACCC), that Coles Supermarkets Australia Pty Ltd (Coles) made false, misleading and deceptive representations in respect of its ‘Coles Bakery’ bread. Coles claimed that its Coles Bakery bread was ‘Baked Today, Sold Today’ and in some cases Coles also used the claim ‘Freshly Baked In-Store today’ (Claims).

The Claims were found to be misleading because the bread products were partially baked and then frozen off site by a supplier. Once the bread products were transported to Coles the baking process was finished by its in-store bakeries. The Court found the representations in the Claims to be false. Coles could now face penalties up to $1.1 million per breach.

In his judgment, Chief Justice Allsop said that Coles should have made “…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 ACCC commented that the Claims would put Coles at an unfair competitive advantage over independent bakeries that actually baked their bread fresh on the premises each day.

This decision is a reminder of the ACCC’s position that consumers should be able to rely on the accuracy of premium claims made by businesses to promote and market their products and services. Premium claims are powerful marketing tools that many businesses employ and consumers should not have to assess the accuracy of the claims themselves.

Please contact us if you have any questions on the above or would like assistance with the legal review of your marketing campaigns and advertising collateral. Mills Oakley has substantial experience in all aspects of Australian consumer law.

Contact Mills Oakley

 

warren-scott

Warren Scott | Partner
T: +61 3 9605 0984
E: wscott@millsoakley.com.au

daniel-livingston

Daniel Livingston | Partner 
T: +61 3 9605 0965
E: dlivingston@millsoakley.com.au

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