The Federal Court of Australia recently handed down the decision of Australian Competition and Consumer Commission (ACCC) v Coles Supermarkets Australia Pty Limited  FCA 634 after complaints were made about the meaning of the phrases “freshly baked bread” and “baked today, sold today”. These phrases were used in Coles’ signage in relation to Coles branded bread which was partially baked overseas before the baking process was completed in Coles’ stores.
Coles used three methods to prepare bread in-store which are:
preparing bread from scratch including making dough from ingredients which were not frozen and then applying heat to the dough, in-store
thawing and applying heat in-store to frozen dough obtained from a supplier
applying heat in-store, to dough which is made, par-baked and frozen by a supplier.
The subject of the proceedings was the third method, i.e. the par-baking of the bread which the ACCC alleged was an express or implied misrepresentation that the bread was baked from scratch, or, entirely baked on the day it was sold.
The ACCC asserted that the misrepresentation would be likely to induce customers to purchase the bread on the belief that they had been baked from scratch or entirely baked on the day of purchase, in breach of sections 18(1), 29(1)(a) and 33 of the Australian Consumer Law (ACL). These sections provide that a person must not engage in misleading or deceptive conduct in trade or commerce.
The Court considered that the relevant test was to identify the misleading conduct and then to consider whether the conduct as a whole was misleading or deceptive or likely to mislead or deceive, judged by their effect on “ordinary” or “reasonable” members of the class of prospective purchasers.
The Court found that:
reasonable and ordinary people would understand the phrase “baked today, sold today” to mean that the entire baking process (not just some of the heating process) had taken place today. Therefore it would be misleading or deceptive or likely to mislead or deceive, for Coles’ advertising to state that a par-baked frozen product was “baked today”, if it was baked previously
similarly, reasonable and ordinary people would be misled by the phrases “freshly baked”, “baked fresh”, “freshly baked in-store” which conveys the message of the baking of fresh dough where the baking process was in fact, the heating of a par-baked, frozen product.
The Court recognised that consumers are often healthily cynical about the language of advertising but that it was still important for Courts not to permit consumers to be misled.
This case is important guidance for companies who manufacture and promote food products.
Author: Kim Nguyen
Alistair Salmon, Partner
T +61 2 8083 0467
Ron Eames, Partner
T: +61 7 3135 0629
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed above.