Coles Pays $61,200 In Fines On Misleading Australian Produce Claims

Written by Shelley Dempsey     01/07/2013 | 11:06 | Category: BUSINESS

Coles has paid six fines totalling $61,200 for allegedly misleading consumers on the country of origin for fresh produce in five stores.

Coles Pays $61,200 In Fines On Misleading Australian Produce Claims

The alleged breaches of consumer law were made between March and May 2013 in stores located across Queensland, NSW, WA and the ACT.

The consumer watchdog ACCC took action following a complaint that Coles had displayed imported navel oranges and kiwi fruit underneath price boards reading: 'Helping Australia Grow' with the triangular 'Australian Grown' symbol. After surveying a number of Coles stores, the ACCC found the signage was also being used in other stores to advertise imported asparagus and almonds.

The Coles signage gave the overall impression that the imported produce was Australian grown, when it was not, says the ACCC. 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 says these identifiers were too small.

"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. Misleading country of origin claims can also have a significant impact on the competitive process and hurt the local economy," ACCC Chairman Rod Sims says.

"While this does not appear to be a case of widespread or systemic 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 misled by those campaigns," Mr Sims says.

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

Coles has advised the ACCC that the problem arose out of the relocation of stock within stores, without updating promotional imagery on price boards. "The ACCC nevertheless considers action is needed, given the importance consumers place on representations of this kind, and the importance of strong compliance processes when choosing to make such claims in the context of a widespread campaign," the ACCC says.

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