Marketing and Advertising Law
NOT EVERYTHING IS FRESH TODAY!
If it’s re-baked bread marketed as fresh baked it is
misleading says the Federal Court of Australia
Coles Supermarkets position fresh fruit, fresh cut
flowers and fresh vegetables at the entrance to give
shoppers the impression of entering into a natural oasis
where everything is fresh today.
As the shopper passes by the fresh produce displays,
according to the Coles website they see the “golden baked
crust” and smell “tempting aromas” of the fresh bread
displays below the “Baked Today, Sold Today” signage at the
Is it any wonder that the shopper believes that the bread
displayed was freshly baked on site?
The regulator, the ACCC, commenced legal proceedings in
2013 against Coles Supermarkets because its “Baked Fresh”
signage was misleading, and gave Coles an unfair competitive
advantage over “smaller bakery businesses which are
genuinely offering a differentiated product”.
The Federal Court of Australia in Australian Competition
and Consumer Commission (“ACCC”) v Coles Supermarkets
Australia Pty Limited  FCA 634 (Allsop CJ) has found
that some of the fresh bread for sale at Coles was half
baked, not freshly baked, and therefore the Coles signage
and marketing was likely to mislead the public and was in
breach of sections 18(1) (misleading conduct), 29(1)(a)
(misleading product history) and 33 (misleading
manufacturing process) of the Australian Consumer Law.
The court will make orders reflecting the decision.
What marketing lessons can we draw from the judgment?
What is “Freshly Baked” bread?
The ACCC’s case was that by marketing its bread as “Baked
Today, Sold Today”, “Freshly Baked” “Baked Fresh” and
“Freshly Baked In-Store” Coles was misleading the public
about how some of the bread had been prepared.
The ACCC calls these credence claims.
Bread can be prepared in one of three ways:
- Scratch: the baker mixes the ingredients, kneads the
dough, shapes and proves it, then bakes it in the oven on
- Frozen dough: the dough is mixed off site, shaped and
frozen in a baking mould; when it is delivered, the baker
thaws, proves and bakes the dough in the oven.
- Par-baked: the dough is prepared, shaped, proved,
part-baked, and snap frozen off site; when it is delivered,
the baker thaws and re-bakes the product until it is
“finished” in the baker’s oven.
The ACCC accepted that bread made from scratch or from
frozen dough was correctly marketed as fresh. The ACCC
claimed that marketing the par-baked bread as fresh bread
The legal arguments
There are no legal definitions for “baked” or “fresh” in
the Australian Consumer Law. Therefore the ACCC asked the
Federal Court to define these terms.
The ACCC accepted that Coles could use the phrase “Baked
In-Store” for the par-baked bread which Coles re-bakes in
the store. The problem was not with use of the word “baked”
it was with the word “fresh”.
The ACCC said that par-baked bread should not
as “Fresh” or “Baked Today” because members of the public
would wrongly assume that the complete process of bread
manufacture took place at the Coles Bakery in the store that
Coles said that the word fresh differentiated between
commercially manufactured bread made with preservatives
which lasts for days, and its “freshly baked” bread which
went stale and was perishable like “fresh fruit”. Coles also
said that “fresh” connoted “recent” rather than complete
baking from scratch. And in any case, the public would take
the use of the word fresh in advertising with a ‘pinch of
Coles presented evidence of similar advertising and
phrases used by competitors who used all three methods to
prepare bread, to demonstrate that that the public would
know that the bread may be par-baked and re-baked, rather
than baked from scratch or from frozen dough.
The Federal Court decision
Chief Justice Allsop concluded: “To many reasonable and
ordinary people, the phrase “baked today, sold today” ... is
not a statement that some baking took place today ... of a
par-baked product. ... The use of the words “fresh” or
“freshly” adds a further dimension. ... What is sought to be
conveyed is a fresh baking process, not a baking process of
par-baked frozen product”.
He considered that point of sale materials called ‘barker
cards’ which stated how the bread was prepared were
inadequate as a disclaimer to remove the misleading
impression of the signage and the packaging because “the
positioning of these cards and the size of the print [make]
it highly doubtful whether many people, if any, would read
them.” He also said that the disclaimer on the Coles website
was inadequate for the same reasons.
He did not rule out it was possible for a retailer to
sell bread “par-baked from frozen product, praising its
virtues, but not misleading the public” but did not offer
any marketing advice.
What does the decision mean for credence claims in the
- As it does in cases of misleading conduct and
representations, the court decides whether the public is
likely to be misled. In this case, the Court dismissed
criticism by Coles of the failure of the ACCC to bring
forward individuals to say they were misled. The Court said
it can carry out an “objective assessment of advertising
using ordinary English words ... without being assisted in
any cost-effective manner by calling members of the public.”
- As it does before commencing proceedings in cases such as
these, the ACCC served a “Notice to Produce” upon Coles.
Coles produced internal marketing documents, power point
presentations and email strings. Coles contested their
admissibility into evidence. The Court found that none were
admissible as admissions against Coles, and that their
weight and effect was marginal.
- One of the par-baked breads Coles sold was Cuisine
Royale, which had been initially baked in Ireland. The UK
Food Standards Agency has published criteria for the use of
the term “fresh” in food labelling in 2008. It stated that
the terms “freshly baked” or “baked in store” or “oven
fresh” should not be applied to part-baked bread products
because it “may mislead consumers into believing that they
are being offered products that have been freshly produced
on site from basic raw materials”. It is possible that the ACCC was referencing these criteria.
Where should the ACCC stop? The decision raises questions
about the use of the word fresh for any food products, not
only bread. How fresh is an apple sold out of season, if has
been in cold storage for months? Should there be a blanket
ban on using the word fresh for products that have been
frozen in the supply chain?
A marketing perspective on the decision follows.
Marketing Commentary provided by Michael Field, Managing
Director of Michael Field Strategic Marketing Consultants
The ACCC targeted Coles because it deemed the words
‘baked fresh’ were misleading and unfair to smaller bakery
businesses. However it is likely that Coles had Woolworths
clearly in its sights, rather than the smaller bakeries.
The grocery business in Australia is a $111 billion
(according to KPMG’s State of the Industry 2013’ report)
business with the top two retailers Coles and Woolworths
collectively holding ~80% share of the total grocery market.
This compares to 48% in the UK, 44% in France and only 24%
combined market share of the top two grocery retailers in
In the grocery wars, there are only two viable positions
to own in the consumer’s mind:
- ‘Fresh’ which is the centrepiece of Woolworths brand
positioning with taglines such as ‘Australia’s Fresh Food
- ‘Value’ or ‘Price’ which has dominated Coles marketing
efforts for decades with their ‘Everyday Low Prices’, ‘Save
Every Day’ and more recently ‘Down, down. Prices are down’
To lay claim to ‘fresh’ through their bakery range is a
clever marketing strategy by Coles as it dilutes the
Woolworths position as ‘Australia’s Fresh Food People’ and
helps Coles release themselves from the unwinnable market
position of ‘price’ with new kids on the block Aldi and
Costco fast becoming serious competitive threats on price.
By including par-baked products in their claim to
‘freshness’ Coles may not have picked the right execution
legally, but the strategy of targeting ‘fresh’ has merit.
It is hard to determine how much damage this decision has
done to the Coles brand, but it is unlikely to be very
serious or long term. With ~80% market share between them,
we can expect to see more tiffs in the aisles with the two
giants fiercely fighting it out for their slice of the pie.
That being said, it is hard to imagine the ACCC will stop
at ‘fresh’ bread. Much of the so-called ‘fresh’
food in supermarkets isn’t as fresh as the advertising would
have you believe. ‘Fresh’ meat could have been
butchered months ago, and those shiny red apples might have
been in storage for more than a year.
So are meat, fruit and vegetables that have been stored
for an extended period still truly ‘fresh’? According
to the Australian Competition and Consumer Commission’s Food
Descriptors Guideline (2006): ‘fresh’ refers to food
put on sale as early as possible and as close to the state
it would be in at the time of picking, catching or
producing; the term ‘fresh’ generally implies that
food has not been frozen or preserved; and as some foods
stay fresh longer than others, it is not appropriate to give
specific guidance on all foods.
Emboldened by their win, expect to see ‘fresh’
fruit and vegetables, juice, meat and flowers under scrutiny
for their ‘fresh’ claims. What implications are there
for Woolworths with the longstanding brand position and
tagline as ‘Australia’s Fresh Food People’? What are
the implications for every business that advertises fresh
bread, fresh fruit, fresh juice or fresh produce?
We may not have long to wait before the ACCC aims for a
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