29/07/2014

The key phrases reviewed by the Court in this case included:

•    "baked today, sold today"
•    "freshly baked"
•    "freshly baked in-store"

The Court heard evidence about the three different types of baking of bread by Coles being from scratch, frozen dough and par-baked.  The case centred on the "par-baked" bread, which is described as a process whereby dough is prepared by a supplier to Coles and placed in an oven to par-bake, then snap frozen, packaged, stored, and then shipped to a Coles store where the baking process is completed.

The ACCC asserted in the case that Coles marketed the par-baked products using:

"an express or implied representation that they were either baked from scratch, or, at least, entirely baked on the day they were offered for sale, meaning that the entirety of the baking or heating process in an oven took place on that day. …. Customers would be likely to purchase bakery products in the erroneous belief that they had either been baked from scratch, or entirely baked on the day of purchase, which is not the case.”

The legal principles in this case are:

•    misleading or deceptive conduct (s.18 of the Australian Consumer Law ("ACL")),
•    false or misleading representation about quality, value and grade of goods (s.29 of the ACL); and
•    misleading conduct as to the nature, manufacturing process or characteristics of goods (s.33 of the ACL).

Coles argued a number of points in defence, including that there was some baking on the day in-store with these products and it had not advertised that it was the entire baking process, and that a number of competitors used similar wording.  

It also argued that consumers have some cynicism about the use by businesses of advertising terms and that details about the baking processes were contained on its website.

The Court held that the advertising was in breach of the law, stating:

"The store signage, the availability of bread on show and the in-store bakery layout, combine to communicate to the ordinary purchaser of bread that baking takes place on the premises and is freshly done …..

The packaging and signage used … do not differentiate between products made from scratch …. and using the par-baked method ….

To many reasonable and ordinary people, the phrase “baked today, sold today” in the context that Coles uses it in the evidence would convey that the baking process, not some heating or baking process, has taken place today …

To place emphasis on advertising licence that bends the truth will not only degrade the language, but lead to a culture of deception in the market.”

The lesson from this case is that all businesses need to be conscious of the message portrayed by their advertising and ensure that consumers will not be misled into erroneous conclusions about the business or the characteristics of its products.

If any reasonable member of the public would get an impression from the words used, an overly formal interpretation of those words, or a suggestion that they shouldn't have got that impression, won’t generally work.

If you have any questions regarding your advertising or the consumer law, please call Townsends Business & Corporate Lawyers on (02) 8296 6222.