Supermarket giant Coles has been declared guilty by the Federal Court of misleading shoppers with claims its bread and other baked goods were “freshly baked”. 

The company is now facing more than $3 million in fines after losing the legal battle over its “Cuisine Royale and “Coles Bakery” range, which included one product from Ireland first baked months earlier.

After the Australian Competition and Consumer Commission (ACCC) launched proceedings against Coles in June last year, Federal Court chief justice James Allsop found Coles had breached three sections of Australian Consumer Law.

“There has been, in my view, a misleading representation available to be understood that these goods have been baked on the day of sale, or baked in a fresh process, using fresh, not frozen, product,” he said.

A lawyer for Coles argued the supermarket never intended the labels to be misleading.

During the court case, Coles’ barrister Philip Crutchfield SC said the supermarket did not intend to suggest the bread was baked on the day with the labelling.

“What is happening with this ‘baked today, sold today’ in a Coles supermarket is that a consumer is being given the choice between the juxtaposition, the commercially manufactured bread, which has preservatives and keeps for longer, with the bread that is baked in-store and doesn’t have preservatives,” Mr Crutchfield told the court earlier in the year.

“The bread that is baked in-store is crunchier, and smells and has the flavour of freshly baked bread. That’s what we submit it is.”

Former Victorian Premier Jeff Kennet, who triggered the year-long investigation, said he hopes the court case sends a clear message across the bow of all advertising agencies.

“We expect them to be able to offer their products or services to use in a way that accurately reflects what they are offering us,” he said.

“I am very pleased that Coles has accepted the umpire’s decision and are not going to challenge it further. I respect that.”

The ACCC has also instigated separate proceedings against Coles for alleged “unconscionable conduct” towards 200 small suppliers, alleging that the company attempted to secure better trading terms and improve their earnings through rebates.