ACCC accepts Retail Food Group’s undertaking: Brumby’s and carbon tax

By Sarah Stowe | 29 Oct 2015 View comments

The Australian Competition and Consumer Commission has accepted a court enforceable undertaking from Retail Food Group, owner of Brumby's Bakeries, regarding comments over the carbon tax and price increases.

The chain found itself the first high profile business caught up in publicity over carbon tax pricing and under the spotlight at the ACCC following comments in a newsletter to franchisees that linked retail price increases to the introduction of the carbon tax.

Retail Food Group has cooperated with the ACCC and offered the undertaking that neither the company nor its subsidiaries (bb's cafe, Big Dad's Pies, Brumby's Bakeries, Donut King, Esquires Coffee Houses, Michel's Patisserie and Pizza Capers) will engage in similar conduct in the future.

Rod Sims, ACCC chairman, said "The ACCC considers that Brumby's carbon price statement may have had the effect of inducing or encouraging Brumby's franchisees to make representations to retail customer linking product price increases to the carbon price without reasonable basis.

"If businesses tell customers that prices have gone up due to the carbon price, or indeed for other reasons, their claims must be truthful and have a reasonable basis, or the business will face potential ACCC action," he said.

The Retail Food Group has taken action to redress the impact of the statement that appeared in a newsletter to Brumby's franchisees. The company has written to franchisees and outlined their legal obligations in relation to price representations and the carbon tax, has published an apology, issued a print ad and is developing training for franchisees and staff with further guidance on the legal requirements.

Sims said "The ACCC seeks compliance with the law, not to necessarily impose penalites. Indeed most of the ACCC's effectiveness comes from steps that stop short of court action."