RFG responds to ‘foolish’ price remarks

GOLD Coast-listed company Retail Food Group ducked for cover yesterday after its Brumby’s bakery chain boss stirred up a political storm with comments that franchisees should “let the carbon tax take the blame” for price rises.

The Australian Competition and Consumer Commission was quick to say it would investigate the remarks, made by Brumby’s managing director Deane Priest in a newsletter sent to the bakery chain’s franchisees.

 
And the Federal Government also weighed into the matter, with Assistant Treasurer David Bradbury saying the company could be fined if it were found to have incorrectly linked price rises to the carbon tax.

“This sort of behaviour is reprehensible,” he said.

“If any breaches of the law have occurred, those involved in this sort of conduct could be up for fines of up to $1.1 billion per contravention.”

Mr Priest made the comments in the context of a recommended retail price review that Brumby’s was undertaking and told franchisees to “take the 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,” he said.

Several calls from the media went unanswered yesterday to parent company Retail Food Group, which also has Donut King, Michel’s Patisserie, bb’s cafe and Pizza Capers under its banner.

Instead, RFG boss Tony Alford issued a statement to the stock exchange in the afternoon saying Mr Priest’s comments were “not sanctioned and were of significant concern to the board”.

Describing Mr Priest’s remarks as “foolish and ill-considered”, Mr Alford said they were not representative of RFG policies or practices.

“As a consequence of the introduction of the carbon tax, there will be further margin and cost pressures on our franchisee community, however it was inappropriate to link this matter with the imminent RRP (recommended retail price) increase.” Mr Alford also informed the market that RFG took its obligations under Australian consumer law “very seriously”.

“We are today communicating with our franchisee community regarding the limited relevance of the carbon tax as to how adjusted RRP price changes should be addressed with consumers. We are also liaising with the ACCC in connection with the matter.”

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