Former Victorian premier Jeff Kennett, who now works for Coles as independent arbiter in disputes between suppliers and the supermarket giant, has just cost the company $2.5 million after the Federal Court handed Coles the whopping fine for misleading conduct.
The court action dates back more than two years to when Kennett, who was upset to discover that the bread and muffins were actually imported, reported Coles to the consumer watchdog, the Australian Competition and Consumer Commission over marketing that said frozen par-baked bread from Ireland was promoted as “Baked Today, Sold Today”.
The ACCC launched legal action against the supermarket over the use of “Baked Today, Sold Today” and “Freshly Baked In-Store” claims and last June the Federal Court ruled that Coles supermarkets breached Australian Consumer Law, handing down the $2.5 million for making false or misleading representations and engaging in misleading conduct.
Chief Justice James Allsop said the contravening conduct was “substantial and serious”.
“Notwithstanding the absence of any specific evidence as to loss or damage by a consumer or a competitor, it is clear that the significant potential to mislead or deceive and thus to damage competitors, the duration of the conduct, and the fact that the goods in relation to which the impugned phrases were used were ‘consumer staples’ indicate that the objective seriousness of the offending conduct was considerable,” he said.
ACCC chairman Rod Sims said the penalty “sends a strong message to companies that they should not use broad phrases in promotions that are deliberately chosen to sell products to consumers but which are likely to mislead consumers.”
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