Coles was last year found guilty of misleading shoppers with false claims on bakery products that were advertised as “baked today, sold today” and “freshly baked in-store” when this was not the case. In some cases the offending breads had been partially baked in overseas factories months earlier before being frozen and transported to Australia.

Bread sold with the false labelling, about 85 million products over three years, generated revenue of about $300 million for the supermarket giant.

In a penalty hearing in the Federal Court on Tuesday, the ACCC said it was seeking penalties of at least $4 to $5 million over the Australian consumer law breaches. Colin Golvan, SC, said a hefty fine was appropriate due to the size of the company, scale of conduct and consumer reach.

“This case is one in which consumers are led to the cash register on the basis of misconceptions about the manufacturing process,” he said.

whole grain brown bread

But lawyers for Coles debated the severity of the misleading conduct, saying continuing strong sales of partially baked bread, despite revelations it was not made wholly in-store, showed the consumer “doesn’t care”.

Philip Crutchfield, SC, for Coles, said “just because we’re big, we shouldn’t get hit with a record fine”.

Coles has already been banned for three years from advertising its bread was made or baked on the same day it was sold when this is not the case, and was last year ordered to display notices in-store advising shoppers of the consumer law breach.

The ACCC’s investigation into Coles’ marketing tactics was prompted by a complaint about bread labelling from former premier Jeff Kennett, who discovered a loaf of bread that was advertised as freshly baked in-store had in fact been made in Ireland.

A Coles spokesman on Tuesday said the supermarket had changed its packaging and in-store signage to improve transparency.

“In talking to customers about our bread range we did not deliberately set out to mislead anybody, but we absolutely accept that we could have done a better job in explaining how these products are made.”

Federal Court Chief Justice James Allsop is yet to make a decision on penalties.

Extracted in full from the Sydney Morning Herald.