AFTER copping a backlash from dairy farmers last year for its claims about farmgate milk prices, Coles has been admonished by the Australian Competition and Consumer Commission (ACCC) for misrepresenting figures in a cartoon posted to YouTube.
The video - no longer available to view - featured images of a hand drawing different pictures along with a voice-over to explain the issue.
"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," ACCC chairman Rod Sims said in a statement.
"Final industry figures showed the 2011-12 farmgate milk price actually decreased to 84 cents."
The figure of 90c was based on a forecast in an industry report, but the ACCC said the supermarket giant should have been aware other reports predicted that the milk price was likely to decline.
Last February the Australian Dairy Farmers (ADF) lobby group issued a stern statement in response to the marketing video “Our Coles Brand Milk Story”, saying “Lack of competition within the supermarket industry and Coles’ subsequent purchasing power, means $1 dollar milk continues to hurt farmer and processor profits”.
When vet student Cass MacDonald saw Coles’ snappy infographic on FarmOnline - pushing the claim that savage milk discounting to $1 a litre was not degrading farmgate milk returns - she decided to put her own drawing skills to the test, compiling an argument to counter the big retailer's marketing spin.
Cass MacDonald's response:
"I've always wanted to speak up and do something to let people know what's really happening to dairy farmers, but writing a letter to Coles wouldn't make much impact," she said.
Ms MacDonald’s video and accompanying article generated an overwhelmingly positive response from readers, whose online comments reflected their frustrations with the retail duopoly’s stranglehold on farmgate returns.
“The current price paid to both farmers and processors in today’s market is unsustainable,” the ADF said last year.
“In the drinking milk states of Queensland, New South Wales and Western Australia for example, the milk price war has seen some farmers’ already poor profit margins crunched by a further 3-4 cents per litre. Milk processors face a similar dilemma.”
At the time, Nationals Leader Warren Truss said dairy farmers would need to reconsider their futures.
Mr Truss said if Coles thought $1/L milk is having no impact on dairy farmers, “then perhaps they should go and talk to some dairy farmers, because it’s clearly having a massive impact”.
“A significant number of dairy farmers have already left the industry in recent times,” he said.
The commission was keen to ensure accuracy in advertising was maintained regardless of the medium, Mr Sims said. Coles will publish corrective advertisements on the same online platforms that the original representations were published.
"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," Mr Sims said.
Coles said in a statement it believed the “key message in the campaign was correct”, but that some information in the infographic was based on estimates which were later updated.
