Consumers shouldn't assume that "baked" means freshly baked, according to Coles. The supermarket chain has defended the allegations made by the Australian Competition and Consumer Commission (ACCC) that they have been misleading the public with "baked" bread labels.

In June, the ACCC claimed in federal court that Coles misled their consumers by claiming that the bread they sell is "freshly baked," "freshly baked in-store," and "baked today, sold today."

Apparently, their bread is only "par-baked" or partially baked in store, which means that after being partially baked off site, their bread products are then frozen and transported to their stores before being fully baked.

"The ACCC is concerned that Coles' lack of distinction in its promotional representations between bread products that are freshly prepared from scratch and par-baked products is misleading to consumers and places competing bakeries that do freshly bake from scratch at competitive disadvantage," the watchdog said.

But on Friday, the supermarket giant owned by Wesfarmers defended labelling its bread products as such.

According to the Australian Financial Review, Coles told the Federal Court that "consumers should not assume word 'baked' means 'baked from scratch.'"

And while they admitted that their loaves have "baked today, sold today" labels, the words "Made in Ireland" are also included. Its par-baked products are also baked to a point at another location and "blast frozen" before being delivered to their supermarkets.

"The products may also be subjected to other processes performed by Coles' in-house bakery staff, such as icing, frosting, or other decoration," according to the document filed, and which was obtained by Fairfax Media.

Coles added that par-baked products are "commonly offered" in supermarkets, bakeries, restaurants, and fast food outlets.

The case will resume in August.

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