Bigger fines are needed to deter retailers from breaking laws, says the nation’s consumer watchdog.

The call comes with Coles slugged with a $2.5 million fine and ordered to pay costs after being found to have falsely advertised pre-frozen bread as “freshly baked” and “baked today”.

The fine, handed down in the Federal Court in Melbourne on Friday, accounts for about a third of the estimated $7.28 million the supermarket giant was found to have earned from sales of the bread before tax and interest.

Rod Sims, the chairman of the Australian Competition and Consumer Commission (ACCC), welcomed the result but said there remained scope for bigger fines in general.

“Penalties have been dismissed as simply the cost of doing business,” he told reporters in Sydney.

“That’s not good enough.

“I’d like to see penalties that are some multiple of what people gained, so that you really get a deterrence message.”

Coles said on Friday its conduct was not deliberately misleading but admitted it “could have done a better job in explaining how these products are made”.

AAP