Coles fined for misleading Country of Origin claims

Posted by AFN Staff Writers on 1st July 2013

The Australian Competition and Consumer Commission (ACCC) has announced that Australian supermarket group Coles has paid six infringement notices issued by the ACCC for misleading Country of Origin labels. Coles was forced to pay $61,200 for the alleged misleading representations made in five of its stores between March 2013 and May 2013. The Country of Origin claims related to fresh produce.

The stores were located across Queensland, New South Wales (NSW), Western Australia (WA) and the Australian Capital Territory (ACT).

The ACCC said it took action following a complaint that Coles had displayed some imported navel oranges and kiwi fruit underneath price boards reading ‘Helping Australia Grow’ with the triangular ‘Australian Grown’ symbol. The ACCC said it surveyed a number of Coles stores and found that the signage was also being used in other stores to advertise imported asparagus and almonds.

The ACCC alleged that this signage gave the overall impression that the imported produce was Australian grown, when it was not. The overseas country of origin was correctly identified either by stickers on the produce itself, on its packaging or under the display bin. However, the ACCC considered that the “relatively small sized” stickers or statements were not sufficient to correct the overwhelming impression of the ‘Helping Australia Grow’ campaign imagery that was associated with the sale of the product.

Coles advised the ACCC that the conduct arose out of the relocation of stock within stores without updating the promotional imagery on the price boards.

The ACCC said it nevertheless considered action was necessary “given the importance consumers place on representations of this kind, and the importance of strong compliance when choosing to make such claims in the context of a widespread campaign”.

“Consumers should be able to rely on the accuracy of claims about food, particularly when they are prepared to pay a premium for products made in Australia,” said Rod Sims, ACCC Chairman. “Misleading country of origin claims can also have a significant impact on the competitive process and hurt the local economy,” he said.

“While this does not appear to be a case of widespread or systematic conduct, ‘Helping Australia Grow’ is a significant national campaign driven hard by Coles to advertise its fresh produce. This is a lesson to all retailers that they need to take care when undertaking significant advertising campaigns to ensure consumers are not being misled by those campaigns,” Mr Sims said.

The ACCC said it is “prioritising its work in relation to credence claims”, particularly those in the food industry with the potential to have a “significant impact on consumers and competitors”.

The payment of infringement notice penalties is not an admission of a contravention of the Competition and Consumer Act 2010. The ACCC can issue an infringement notice where it has reasonable grounds to believe a trader has contravened a certain consumer protection laws.

This is not the first time in recent weeks that Coles has been in the ACCC’s sights. Australian Food News reported in June 2013 that the ACCC had instituted legal proceedings in the Federal Court against Coles for “false and misleading” claims about some of its baked goods.