FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited (No 2) [2014] FCA 1022

THE COURT MAKES THE FOLLOWING DECLARATIONS:

1.    A declaration that the respondent (Coles), from 1 July 2012, by supplying in Coles supermarkets which have an in-store bakery (Coles Bakery Stores) bakery products in packaging displaying the words “Baked Today, Sold Today”, represented to customers in its supermarkets in Australia that the products contained in the packaging were entirely baked on the day on which they were offered for sale, in circumstances where only some baking of certain products contained in that packaging had taken place on the day on which they were offered for sale, and in relation to these products Coles thereby:

(a)    engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive, in contravention of section 18 of the Competition and Consumer Act 2010  (Cth), Sch 2 (Australian Consumer Law) (ACL);

(b)    made a representation in trade or commerce, in connection with the supply or possible supply or promotion of the supply of goods that was false or misleading as to the history of the goods in contravention of section 29(1)(a) of the ACL; and

(c)    engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, the manufacturing process, and the characteristics of goods in contravention of section 33 of the ACL.

2.    A declaration that Coles, from 1 July 2012, by supplying in Coles Bakery Stores bakery products in packaging displaying the words “Freshly Baked In-Store” and by displaying signage in Coles Bakery Stores which displayed the words “Freshly Baked” and “Baked Fresh” represented to customers in its supermarkets in Australia that the products contained in the packaging and the products offered for sale proximate to the signage were baked from fresh dough, and that they had been entirely baked on the day on which they were offered for sale and that they had been entirely baked in the Coles Bakery Store in which they were sold on the day on which they were offered for sale, in circumstances where only some baking of certain products contained in that packaging and the products proximate to the signage had taken place in the Coles Bakery Store in which they were sold on the day on which they were offered for sale and that baking was of frozen par-baked product, not fresh dough, and Coles thereby:

(a)    engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive, in contravention of section 18 of the ACL;

(b)    made a representation in trade or commerce, in connection with the supply or possible supply or promotion of the supply of goods that was false or misleading as to the history of the goods in contravention of section 29(1)(a) of the ACL; and

(c)    engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, the manufacturing process, and the characteristics of goods in contravention of section 33 of the ACL.

THE COURT ORDERS THAT:

3.    Coles be restrained for a period of three (3) years from the date of this order, whether by itself, its servants, agents or otherwise in connection with the supply or possible supply, or the promotion by any means, of bread products from making any representation on any packaging, signage, website or other promotional material that such products:

(a)    were entirely baked on the day on which they were offered for sale; or

(b)    were entirely baked in a Coles Bakery Store on the day on which they were offered for sale; or

(c)    were baked from fresh dough,

when that is not the case.

4.    Coles at its own expense:

(a)    Within fourteen (14) days of the date of this order and for a period of ninety (90) days display a notice in the terms and form (including font, size and formatting) of annexure A hereto (the Corrective Notice) in a prominent location on counters, or another place if a counter not be available, clearly visible to customers at all times in each in-store bakery section of each Coles Bakery Store in Australia (including those identified by Coles on its website www.coles.com.au/our-range/our-products/bakery/in-store-bakery-locations);

(b)    Within fourteen (14) days of the date of this order and for a period of ninety (90) days publish on its website homepage located at the URLhttp://www.coles.com.au (Coles homepage) and on the internal webpage accessible at http://www.coles.com.au/our-range/our-products/bakery (Coles bakery internal webpage), the Corrective Notice and ensure that the Corrective Notice complies with the following specifications:

      (i)    The Corrective Notice is to be accessible through a prominent one click link displayed in the top one third (1/3) of the homepage of the Coles homepage and the Coles bakery internal webpage (based on the entire length of the page rather than the screen view) with the following specifications:

           (A)     the words "A NOTICE PUBLISHED FOLLOWING ACTION BY THE ACCC" are to be in uppercase 14 point, bold, black, sans serif font on a white background, centred and in a bordered box;

           (B)     the words "Click here for further information" are to be in 14 point, black sans serif font on white background, centred below the words "A NOTICE PUBLISHED FOLLOWING ACTION BY THE ACCC" in the same bordered box;

           (C)     the bordered box and its contents, including the white space, is to operate in the form of a one-click hyper-link to the notice; and

           (D)     the border will be black;

      (ii)    the heading of the Corrective Notice is to be in Haptic Extra font that is no less than 25 point size, bold, black and on white background;

      (iii)     the body of text of the Corrective Notice is to be in Arial font that is no less than 14 point size, black and on white background;

      (iv)     the border and text of the Corrective Notice will be black;

      (v)    the Corrective Notice will be displayed on a stand-alone web page that is coded in standard 'HTML' format; and

      (vi)     the Corrective Notice will not be displayed as a 'pop-up' or ‘pop-under’ window.

5.    The question of the pecuniary penalties that Coles may be ordered to pay to the Commonwealth of Australia in respect of each contravention of sections 29(1)(a) and 33 of the ACL, as well as such further or other orders as the Court thinks fit, be heard on a date to be fixed by the Court.

6.    Coles pay the applicant’s costs of and incidental to the proceeding to the conclusion of the trial on liability save and except for the costs of and incidental to the applicant’s application for leave to inspect the documents produced under paragraph 4 of the Schedule to the subpoenas dated 2 December 2013 issued to Frozen Bakery Solutions Pty Ltd, Speedibake (a division of George Weston Foods Ltd) and Laurent Bakery Pty Ltd (which costs are subject to order 4 of the orders made by Mortimer J on 11 February 2014).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

annexure a

REASONS FOR JUDGMENT

1    On 18 June 2004 I published reasons in this matter and directed the parties to provide submissions as to orders if they could not agree upon them. The parties were not able to agree upon orders and filed competing draft orders together with submissions.

2    The draft orders supplied by both sides had a degree of complexity which I do not think is warranted by the matter. As my essential orders sought to make clear in particular from [140] onwards the issues litigated were tolerably straight-forward in terms of expression. I do not think over-complexity is required. Nor do I think a declaration in the form of reduction to the particularity of evidence is either required or appropriate in this case.

3    The orders reflect the case made by the ACCC which was directed to par-baked products. I appreciate that my reasoning in relation to “freshly baked” and “baked fresh” may conceivably go beyond that, but the ACCC should be entitled to relief only upon its pleaded case.

4    In the circumstances of this case, I do not think there is any necessity for compliance orders of the kind propounded by the ACCC. The publicity already received by Coles and the publicity likely to be received by the Corrective Notice to be displayed in stores and on the website will amply act as a discipline for the need for compliance.

5    One matter should be stated about the injunction I have made. The injunction is straight-forward and simple. The ACCC wished to include the usage of particular words which had been used in the proceedings. Coles in answer to this wanted a disclaimer or qualification to the effect that the words could be used if it made clear that the baking process was only partly undertaken on the day. The inclusion of both would be apt to produce difficulty. As I made plain in my judgment, the context of any particular representation will have to be taken into account to assess its accuracy. I do not repeat why I thought these representations were misleading or deceptive. Coles should be restrained from making the misleading or deceptive representations that they have made by the substantively simple expression that I have said. It is a matter for Coles to so conduct its business to ensure that the representations it makes do not contravene the order.

Associate:

Dated:    29 September 2014