Bread insurrection – discounter Aldi Süd brought to trial by bakers

11 October 2010

Jarste Akkermann

The National Federation of Bakers Association has started an open dispute over the vending machines of the discount supermarket Aldi Süd. The National Federation of Bakers Association is challenging Aldi Süd because of consumer perception. The crucial question is whether the vending machines used by Aldi Süd bake the bread and bread rolls or only brown them. The National Federation of Bakers Association has filed an action against Aldi Süd before the District Court of Duisburg because of misleading advertising.

The bone of contention is the new vending machines that compete with regular bakeries. Aldi Süd advertises its new service with slogans like “From now on we bake bread and bread rolls the whole day long: fresh from the oven – directly into the bag”. The National Federation of Bakers Association argues that the discounter does not bake the rolls and the bread freshly but only heats them up and thereby browns them. The essential production steps are performed industrially by large baking companies far away from the vending machine.

The National Federation of Bakers Association is the information and action committee of German bakers. Together with the bakers' guild and the local guild associations it represents the interests of German bakers. Aldi Süd is one of the well-known and largest discounters in Germany. Since 2009 the discounter has equipped several 100 stores with the vending machines with which consumers can help themselves to loose warm bread and bread rolls within a few minutes by pushing a button.

According to Aldi Süd the vending machines are a technical innovation. In a separate room behind the vending machine dough pieces - provided by suppliers – are baked and not simply browned. Furthermore, consumers would be informed that the dough pieces are delivered by independent suppliers.

The question is where the real baking process takes place which causes a so-called gelatinisation of the flour. The District Court in Duisburg will have to look into the complete chain of production more closely. Furthermore, the District Court will have to review what the general expectation of consumers regarding the baking process is.

It can be assumed that most consumers do not seriously care about whether the discounter actually bakes or browns its bread or bread rolls. They know they receive a low priced product ready to be eaten. The interesting question is whether consumers still expect a “baked” product in common bakeries. Common bakeries usually advertise freshly baked products. But many of them receive their products from large baking companies already baked. Many bakeries do not traditionally produce their own bread or bread rolls any more by making dough pieces and baking them. Therefore, the question is whether consumers are being misled by the slogan “From now on we bake bread and bread rolls the whole day long: fresh from the oven – directly into the bag”.

In addition to the allegation of misleading advertisement the National Federation of Bakers Association argues that Aldi Süd is not in line with labelling requirements regarding mixed brown rye bread (“Roggenmischbrot”). The labelling of bread as “mixed brown rye bread” is only allowed if the flour contains at least 50% rye flour. Aldi Süd has advertised its mixed brown rye bread containing only 34% rye flour. According to the National Federation of Bakers Association this does not suffice and thereby constitutes a misleading advertisement pursuant to unfair competition law.

There is no simple answer to the question of whether Aldi Süd labels its bread in a misleading way. The German Regulation relating to the Labelling of Foodstuff generally covers questions on labelling of food, but is not applicable to loose bread as it only covers prepackaged food. The Guidelines of the German Food Law Codex for bread and cookies are commonly used for filling this gap in legislation. However, the Guidelines of the German Food Law Codex for bread and cookies are not mandatory. The Guidelines require an amount of rye flour between 50% and 90% for bread labelled as “mixed brown rye bread”. The required amount of “at least 50%” has to be measured by taking into account all ingredients like water, flour, salt and sugar. That means that Aldi Süd would violate the Guidelines and by that unfair competition law if the indication of 34% referring to rye flour relates to the total amount of flour used in the bread. In contrast to that Aldi Süd would not violate unfair competition law if the indication of 34% refers to the total amount of all ingredients. At present it is unclear what the indication relates to.

The lawsuit filed by the National Federation of Bakers Association mirrors the latest developments in the market of pastries. So far there has only been a battle between industrial bakery chains against small traditional and local bakeries. Small traditional bakeries have often had difficulties in their resistance as more and more consumers have required a large quantity of bread and bread rolls for low prices. Aldi Süd has fuelled the flames of conflict by offering even cheaper pastries. Even if the claim of the National Federation of Bakers Association is dismissed by the District Court in Duisburg, it has already had an impact on the reputation of Aldi Süd. The media coverage around the dispute has not been in favour of Aldi Süd.  

Frankfurt Partner Ulf Grundmann recently gave a TV interview for German national broadcast organisation ARD on the current legal disputes regarding the sale of bakery products in the stores of German discount giant, Aldi. Click here to view the full story (in German).