Citrus growers rejoice as Coles fined $60,000 by watchdog for mislabelling fruit

The country’s leading lobby group for citrus growers has praised the Australian Competition and Consumer Commission for its investigation of misleading representations in the grocery sector, as yesterday Coles paid more than $60,000 in infringement notices.

The supermarket giant paid six infringement notices issued by the ACCC totalling $61,200 for misleading representations in relation to the signage of its fresh produce.

The allegedly misleading promotional signs were present in five stores between March and May 2013 and represented imported navel oranges and kiwi fruits as home-grown.

The fruit was correctly labelled with its overseas country of origin either by stickers on the produce itself, on its packaging or under the display bin, but at the same time it was positioned under price boards which read “Helping Australia Grow” with the triangular “Australian Grown” symbol.

The ACCC ruled the overall impression was that the imported produce was grown in Australia because the relatively small-sized stickers or statements were not sufficient to correct the impression of the Australian grown campaign imagery.

Citrus Australia chief executive Judith Damiani told SmartCompany this issue arose at a time when Queensland farmers needed the support of Australia supermarkets to help them recover from the Queensland floods.

“In that period from March to May, it was very challenging for citrus growers and Citrus Australia worked very hard to assist the Queensland citrus farmers and keep the markets open for them,” she says.

“We worked hard with the wholesalers and the retailers, including Coles, to assure them the crops were still there and to support the local produce.”

Damiani says the local orange season was just starting, with the oranges “trickling into the market” during April.

“It’s important for consumers to know where their food comes from,” she says.

However, there are some caveats.

Damiani says while it’s “critical” the ACCC monitors and enforces businesses over misleading representations, Coles’ conduct only occurred in five of its stores.

“We have been working with Coles on a smoother transition to Australian produce and we continue to work with them on this transition. While five out of 750 is a small number, there is a lesson to be learnt about that.”

“Misleading representations shouldn’t be tolerated whether it’s intentional or accidental. You don’t have time when you go shopping to read every label and it needs to be made easier for customers to know where their food comes from,” she says.

While Coles paid the infringement notices, it is not an admission of guilt.

“Coles does not believe that it has contravened any law, but has paid the ACCC fines as a matter of practical expediency to avoid a lengthy and costly legal action in defending our position,” the supermarket said in a statement.

“Coles remains committed to its ‘Helping Australia Grow’ and ‘96% Australian fresh produce” advertising statements despite infringement notices issued by the Australian Competition and Consumer Commission over claims of misleading consumers,” it said.

ACCC chairman Rod Sims said in a statement it did not appear to be a case of widespread or systemic conduct, but it was a “lesson to all retailers” to take care not to mislead consumers when undertaking significant advertising campaigns.

“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,” Sims says.

Coles told the consumer watchdog its conduct arose from the relocation of stock within stores without updating its promotional imagery.

These claims against Coles come as late last week an online ugg boot trader admitted to the ACCC it had falsely represented its ugg boots as Australian made.

Hall and Wilcox partner Sally Scott told SmartCompany credence claims, which include country of origin claims, was identified as a focus area for the ACCC earlier this year.

“The claims against the ugg boot company last week and against Coles announced yesterday are consistent with this focus.”

“During Rod Sims’ tenure, he has focused on Woolies and Coles, but mainly in the competition law space. He appears to be now also going after them in the consumer law space,” she says.

Scott says businesses need to realise the overall impression of signage and advertising, not just the actual words used, can determine whether or not there has been misleading conduct.