Brumby’s Bakery has been slapped with an undertaking by the Australian Competition and Consumer Commission after telling its franchisees to blame price rises on the carbon tax – but the competition watchdog says it’s not making an example out of the franchise.
The chain was the first to be slammed by the ACCC with regard to the carbon tax, after managing director Deane Priest sent a newsletter to franchisees telling them to start raising prices in June, and blame any on the carbon tax if customers asked.
Priest has since resigned.
Get business news first
Sign up to SmartCompany’s daily newsletter
The ACCC has now confirmed Brumby’s has accepted an enforceable undertaking, which includes writing to franchisees and outlining legal obligations under proper representation of prices. Staff will also receive more training.
ACCC chairman Rod Sims says the outcome is designed to seek compliance with the law, “not to necessarily impose penalties” – and referenced the “excellent co-operation” from the company.
ACCC deputy chair Michael Schaper says the watchdog isn’t out to “make an example” of the company, instead saying the undertaking is in line with the severity of the dispute.
“I think Retail Food Group responded as quickly and promptly as you would have hoped, and they’ve been completely open about it, completely public, and I think they’ve done the right thing after discovering what had happened.”
Schaper says it’s difficult to determine how severe future undertakings will be, given they’re looking at every issue case-by-case.
“We have other matters in train, and we’re just trying to play them one by one.”
Schaper is also concerned businesses need to understand the ACCC is not on a “witch hunt”.
“We’re not just deliberately looking. We’re keen to see businesses do the right thing, and we’re just looking for people who are deliberately misleading.”
“If you’re legitimately trying to do the right thing, then you’ll be okay.”
However, Schaper says the ACCC was concerned over the Brumby’s incident, as the company was a franchise.
“For franchise systems, franchisees are expected to follow the orders of the franchisor. If they receive that newsletter, they may feel pressure to follow those orders.”