ACCC Cow-Tips Coles Over Milk Price Claims

The Australian Competition and Consumer Commission (ACCC) has taken Coles Supermarkets to task over factual inaccuracies in a YouTube advertisement about milk pricing. In its Our Milk Story video, Coles boasted that the price it paid dairy farmers for supplying milk to processors had increased over 2011-12. In reality, the price paid to farmers actually went down during this period.

In 2013, Coles released an explanatory video in response to public debate about the impact of retail milk price reduction on Australian dairy farmers. The video included the claim that the farmgate milk price had increased by four cents in 2011-12, meaning farmers received a higher cut than before. However, the figure was based on premature and ultimately inaccurate pricing estimations:

Coles represented in a video and cartoon on social media that the farmgate milk price increased from 86 cents per two litre bottle of Coles-brand milk in 2010-11 to around 90 cents in 2011-12, when in fact this was an estimate and final industry figures showed the 2011-12 farmgate milk price actually decreased to 84 cents.

In other words, Coles claimed that dairy farmers were receiving more money than before when they were actually receiving less. In addition, the video estimated that processors received around $1 per 2 litres of Coles-brand milk which was unable to be substantiated. The video also claimed that cheaper retail prices resulted in increased consumption of drinking milk and subsequently increased Australian dairy industry production; an opinion passed off as fact.

“At the time it published the material Coles was aware, or should have been aware, of other reports that predicted that final industry figures would show a decrease in the farmgate milk price to 84 cents in 2011-12,” the ACCC report explains. “Coles has admitted that its making of these representations would be likely to have contravened section 18 of the Australian Consumer Law, which prohibits misleading or deceptive conduct.”

Coles has agreed to publish corrective advertisements on the same online platforms that the original video was published which will presumably include YouTube. The company must also refrain from making misleading or deceptive representations about the impact of price reductions of milk on farmers for the next three years. It must also review its Australian Consumer Law compliance program as it relates to the application of section 18 of the Australian Consumer Law to advertising and promotional strategies relating to Coles brand milk.

[Via ACCC]