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14 July 2014 Recent ACCC enforcement activities serve up 'food for thought'

 


In Brief

Recent ACCC enforcement activities have focused on false credence claims in relation to food products. This article provides a brief overview of relevant sections of the Australian Consumer Law (ACL) and discusses some of those recent ACCC enforcement actions.


FALSE OR MISLEADING REPRESENTATIONS, AND MISLEADING OR DECEPTIVE CONDUCT - THE AUSTRALIAN CONSUMER LAW

Section 18 of the ACL prohibits the making of statements in trade or commerce that are misleading or deceptive, or would be likely to mislead or deceive. Such conduct will often involve a misrepresentation which may be conveyed by words, graphics, images or even silence by, for example, failing to disclose relevant information. As is apparent from the various misrepresentations described below, offending misrepresentations may, inter alia, be disseminated on product packaging, labelling, websites, advertising, statements, demonstrations or presentations.

Section 29 of the ACL makes it unlawful for a business to make false or misleading representations about goods or services when supplying, offering to supply, or promoting those goods or services. That section contains a list of the various prohibited false or misleading representations which include false representations relating to: the standard, quality, value or grade of goods or services; the composition, style, model or previous history or use of goods; or, the place of origin of a product.

BAROSSA FARM PRODUCE 'BLACK PIG' PRODUCTS

On 16 June 2014, the ACCC announced that it had accepted a court enforceable undertaking from Barossa Farm Produce Pty Ltd in respect of false or misleading representations and misleading or deceptive conduct. The ACCC had found that between 9 December 2010 and 28 May 2013 Barossa Farm Produce made various representations on product labelling, websites, social media as well as during a cooking class. The representations in question were that its "The Black Pig" smallgoods were made from heritage Berkshire pigs, or other heritage black pig breeds; and/or free range pigs, when in fact this was not the case. A statement on two Barossa Farm Produce websites that it knew 'the origin of every animal that makes its way onto the plate' was also considered to be misleading as the company did not know the origin of every animal. ACCC Chairman Rod Simms commented that these misrepresentations had 'potential to give Barossa Farm Produce an unfair advantage in the market, as consumers are likely to seek out and pay more for products containing specialised gourmet ingredients.'

COLES 'FRESHLY BAKED' AND 'BAKED TODAY' MARKETING CLAIMS

The Federal Court found, on 18 June 2014 that claims by Coles that its 'Cuisine Royale' and 'Coles Bakery' bread were 'Baked Today, Sold Today' and, in some cases, 'Freshly Baked In-Store' were false, misleading and deceptive. The breads in question were partly baked and frozen off-site by a supplier, and then transported to and finished at Coles' in-store bakeries. In its press release concerning the Federal Court decision the ACCC re-asserted that it considers food credence claims to be a priority for enforcement. A further Federal Court hearing will be held at a later date to determine the orders that will be made against Coles. 

'VICTORIA HONEY' MISREPRESENTATIONS

Basfoods (Aust) Pty Ltd paid penalties totalling $30,600 in respect of ACCC infringement notices relating to Basfoods 'Victoria Honey'. The ACCC found that the 'Victoria Honey' product mainly constituted sugars from plants and not honey produced by honey bees. The representation that the Victoria Honey was produced from honey bees was made on the product labelling and on the Basfoods website. Moreover, the product was not a product of Victoria, Australia but was a product of Turkey. The ACCC found these to be false or misleading representations about the composition and place of origin of the product. The ACCC commented that this misled customers and disadvantaged competing honey suppliers.

If you have any queries on dealing with marketing or advertising issues, or Australian Consumer Law compliance generally, please contact us.


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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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