Woolworths, which brands itself as "The Fresh Food People," launched the website "Fresh in Our Memories" late yesterday to commemorate ANZAC Day on April 25.
ANZAC stands for the Australian and New Zealand Army Corps, which was part of a disastrous British-led ground invasion of Turkey's Gallipoli peninsula on April 25, 1915.
The anniversary of the start of the nine-month campaign by the multinational British Empire force in World War I has become a major national day for both Australians and New Zealanders.
Veterans Affairs Minister Michael Ronaldson today described the site as an ad. He said he contacted Woolworths as soon as he became aware of the campaign and "asked them to end it."
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Under the Protection of Word "ANZAC" Act 1920, permission for its commercial use must be granted by the government, he said.
"The Australian community quite rightly expects that the word 'ANZAC' is not trivialised or used inappropriately and as minister for veterans affairs, I am responsible for ensuring that any use of the word 'ANZAC' does not provide commercial benefit to an organisation," Ronaldson said in a statement.
"The site was developed to give our staff and customers a place to put their stories to mark the Centenary of ANZAC," the company said in a statement. "We regret that our branding on the picture generator has caused offense. This was clearly never our intention.".
The 1920 legislation carries a maximum 12-month prison sentence and fines of 50,000 Australian dollars (USD 38,000) for a corporation and USD 7,600 for an individual.
Ronaldson said he had accepted Woolworths' explanation that it did not know permission was needed to use the word.
"I hope that the events of last night are a salutary reminder to everyone that this is a very, very special word for all Australians," he said.