THE Australian Competition and Consumer Commission has accepted a court-enforceable undertaking from the owner of Brumby’s Bakeries Pty Ltd following comments made by the bakery to its franchisees suggesting that they link retail price increases to the carbon price.

The Retail Food Group had offered a court-enforceable undertaking that neither it nor its subsidiaries would engage in similar conduct in the future, said ACCC chairman Rod Sims.

On June 8, the managing director of Brumby’s distributed a newsletter to about 250 franchisees that contained the following statement:

“… We are doing an RRP review at present which is projected to be in line with CPI, but take an opportunity to make some moves in June and July, let the Carbon tax take the blame, after all your costs will be going up due to it.”

The managing director subsequently resigned.

“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 customers linking product price increases to the carbon price without reasonable basis,” Sims said.

“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 Retail Food Group had written to franchisees outlining their legal obligations associated with price representations and the effect of the carbon price. Retail Food Group was also developing training for staff and franchisees with further guidance on their legal obligations.

Brumby’s has four stores in the ACT.