The competition watchdog has reprimanded Coles over a YouTube cartoon advert on milk price discounting that appeared on its social media channels last year.
The Australian Competition and Consumer Commission (ACCC) said it took action after it received complaints from dairy farmer organisations, and Coles pulled the ads in May last year.
Coles published the video and cartoon during a time of intense public debate about the impact of $1 milk on Australian dairy farmers who supplied the product, according to the ACCC.
In the clip, which was entitled 'Our Coles Brand Milk Story', the retailer said the farm gate return for 2011-12 increased from 86 cents to 90 cents per two-litre bottle.
However, this was just an estimate, according to the ACCC, which says that the farm gate milk price actually fell by two cents to 84 cents, according to industry figures.
The ACCC pointed to other opinions and unsubstantiated facts in the advert. Coles said, for instance, price reductions would boost consumption, leading to increased dairy production. Coles also said its margin on its two-litre milk product had decreased from 55 cents to 10 cents in two years and processors received about $1 per two litres in that same time.
The ACCC said Coles had undertaken to not make misleading or deceptive representations on the impact of Coles milk prices for a period of three years and also has to retrain its media relations staff to ensure they comply with consumer law in future.
The retailer will publish corrective ads at its own expense on the same online platforms, as ordered by the ACCC.
“The ACCC is concerned to ensure that companies are applying the same degree of Australian Consumer Law compliance to representations made in social media versus other forms of advertising. For this reason, the ACCC considered it was important that Coles used social media to correct any misleading impressions formed by viewers,” ACCC Chairman Rod Sims said.
“The ACCC was concerned that Coles presented estimates and opinions as facts and that a number of representations made in the video and cartoon could not be substantiated by Coles,” he said.
The Queensland Dairyfarmers’ Organisation (QDO) said the ACCC’s findings were vindication of its hard work arguing against spin and marketing tactics.
“While we welcome this finding from the ACCC, the industry sees this as just the tip of the iceberg,” QDO president Brian Tessmann said.
“This finding has nothing to do with what the industry sees as predatory pricing tactics as a result of the milk war – which is where we really need action. To fix the crisis occurring at the farm gate, we need the will from the Federal Government to strengthen the Competition and Consumer Act and introduce a Mandatory Code of Conduct,” he said.
The clip 'Our Coles Brand Milk Story' was published on YouTube and distributed via other social media channels.
