Brumby's apologises over carbon remarks

4 Jul 2012, 4:10 pm   -   Source: AAP

The parent company of Brumby's bakery has apologised over advice sent to franchisees that the carbon tax would be blamed for any price rises.

The parent company of Brumby's has apologised over carbon tax advice given to the bakery franchisees, saying it was foolish and ill-considered.

The advice from Brumby's managing director, Deane Priest says stores can make more money by raising prices now, because people will blame the carbon tax.

"We are doing an RRP (recommended retail price) review at present which is projected to be in line with CPI (consumer price index), but take the opportunity to make some moves in June and July," Mr Priest wrote in the June edition of Backmix, an internal newsletter.

"Let the carbon tax take the blame, after all, your costs will be going up due to it."

Retail Food Group chief executive Tony Alford said in a statement to the stock exchange on Wednesday the comments "were not sanctioned and are of significant concern to the board".

"Following thorough investigation of the matter we are satisfied that the comments were not made in an effort to encourage our franchisee community to link (price) adjustment to the carbon tax," he said.

"But rather (they) were foolish and ill-considered remarks when placed in the context of the internal franchisee communication."

Mr Alford said as a consequence 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 increase."

The company is writing to franchisees about the "limited relevance" of the carbon tax to recently adjusted prices.

The Australian Competition and Consumer Commission (ACCC) is making inquiries.

"We are also liaising with the ACCC in connection with the matter," Mr Alford said.

He unreservedly apologised for the "unacceptable error of judgment".

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