Supermarket giant Coles has been ordered to pay penalties of $2.5 million for substantial and serious misleading marketing claims that bread products were freshly made.

Last year, the Federal Court found claims products were “baked today, sold today” and in some cases, “freshly baked in-store” were false, misleading and deceptive due to them being partially-baked and frozen off-site by a supplier, transported and ‘finished’ at in-store bakeries within Coles supermarkets.

In a statement Coles said it did not “deliberately set out to mislead anybody” but accepted “we could have done a better job explaining how these products are made”.

In imposing the major fines, Chief Justice Allsop said the evidence before the Court showed Coles had engaged in the campaign with the clear purpose of improving its market share “vis-à-vis its competitors, being bakeries such as Bakers Delight”.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said he was pleased with the verdict, saying the penalty sends a strong message to companies they should not use broad phrases in promotions that are likely to mislead consumers.

“As the Chief Justice pointed out, it is important that sellers in the market recognise consumers are entitled to reliable, truthful and accurate information,” he said.

The ACCC took this action because it was concerned Coles’ claims about its par-baked bread were likely to mislead consumers. The conduct also placed independently-owned and franchised bakeries that entirely bake bread from scratch each day at a competitive disadvantage.

Coles’ conduct was part of a nationwide campaign promoted in 637 supermarkets. “Baked today, sold today” was used extensively on packaging for par-baked products across a three-year period.

Last year we changed our packaging and in-store signage to improve our message to customers. We are proud of the quality of our bread, whether baked from scratch in-store or ‘par baked’ by our Australian suppliers and finished in our ovens,” a spokesperson for Coles said.