Bakery franchise Brumby’s has apologised for comments that could put the company in hot water with the Australian Competition and Consumer Commission. The ACCC is following up a leaked letter sent to franchisees advising them to put up prices and blame the increase on the carbon tax.

In the June 2012 newsletter Backmix, leaked to the West Australian, the Brumby’s managing director Deane Priest advises franchisees on ways to boost sales.

The third points suggests franchisees “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 ACCC only recently introduced a Carbon Tax Claims Hotline for individuals and businesses to report suspicious cost increases.

In a statement the ACCC said:

“In light of the comments made in the newsletter the ACCC will be making inquiries of Brumby’s.

“The ACCC would be concerned if any franchisor encouraged or induced its franchisees to make misleading price claims about the impact of the carbon price.

“The ACCC’s role in respect of carbon pricing is to inform and educate businesses and consumers about their rights and obligations under the Competition and Consumer Act (CCA) and to take enforcement action where required to ensure compliance with the law.

“Businesses are entitled to increase their prices as they see fit. It is business as usual, so long as any claims or representations made about the impact of the carbon price are truthful and have a reasonable basis.

“Where the ACCC discovers conduct that maybe of concern, the ACCC can issue warning letters, infringement notices of $6,600 or take court action with penalties up to $1.1 million for each of the act.”

Brumby’s apology

Brumby’s has posted an apology to its customers on its Facebook page:

“Brumby’s would like to offer our sincerest apologies to our valued customers regarding any concerns they may hold in connection with the pricing of our products or the suggestion that increases to them may have been caused by the Carbon Tax. 

“Brumby’s has maintained a strong and engaging customer focus for over 30 years based upon honesty and transparency. Our Brumby’s franchisees also pride themselves on delivering an exceptional customer experience based on quality products that represent great value for money.

“We genuinely regret this incident and unreservedly apologise for what is an isolated and unacceptable error of judgment on the part of management. We are committed to regaining your trust and ensuring Brumby’s great products and exceptional value well into the future.”

• Brumby’s is part of the Retail Food Group which also includes Donut King and Michel’s Patisserie.

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