Today, the Australian Competition and Consumer Commission (ACCC) launched a hearing in the Federal Court alleging H.J. Heinz Company Australia Ltd promoted their Little Kids product āShredzā as healthy when it actually contains over 60 per cent sugar. The action followed a complaint by the Obesity Policy Coalition about food products containing a very high sugar content.
Background
Since 2016, the ACCC was seeking declarations, injunctions, pecuniary penalties, corrective notices and costs after accusing Heinz of misleading consumers over the nutritional value of its Shredz product range. It was reported on the productsā packaging, images of fresh fruit and vegetables beside statements such as ā99% fruit and vegā. This claim is supported by another statement made on the back cover, which emphasises toddlers will independently discover āthe delicious taste of nutritious foodā.
The ACCC identified that the images and statements deceive consumers into believing the equivalent nutritional value to fruit and vegetables and are a āhealthyā food for children aged one to three years. There were three varieties consumers could choose from that were available in 2013 but were all predominantly made from fruit juice concentrate and pastes.
Criticisms
ACCC Chairman Rod Sims said in a media release the amount of sugar in the product āis significantly higher than that of natural fruit and vegetables…An apple is about 10 per cent sugar [but] these products are around 60 and 70 per cent sugarā. Mr Sims also argued Heinz Shredz products āare likely to inhibit the development of a childās taste for natural fruit and vegetables and encourage a child to become accustomed to, and develop a preference for, sweet tastesā. Similarly, OPB executive director Jane Martin said Shredz contains 12 grams of sugar per serve, which would take almost an entire dayās worth of added sugar for a two-year-old. Ms Martin said āmanufacturers are turning to what sounds like it might be healthy by using sugar from fruit…these sorts of high-sugar arenāt an appropriate food for kids.ā
The company continuously denied the ACCCās allegations by arguing it complied with Australian labelling and food laws. However, the product is no longer available. Heinz decided to pull the products from sale during the ACCCās investigation.
The Australian Consumer Law
The ACCC alleges Heinz contravened Australian Consumer Law (ACL) by making false and misleading representations, and engaging in conduct liable to mislead the public. Mr Sims said in a radio interview the test in the ACL is not all about misleading consumers. In fact, the question is āwhat would a reasonable consumer believe theyāre buying?ā Mr Sims said the ACCC wants to clearly enforce that major companies have obligations under the Australian Consumer Law to ensure its productsā health claims do not mislead the public.
Generally, businesses are not allowed to make statements that are incorrect or likely to create a false impression. It is considered illegal. Such a rule applies to advertising, product packaging, and any information provided to you by staff or online. The ACCC recommends businesses should not do the following:
- Guess the facts;
- Omit relevant information;
- Make ambiguous or contradictory statements or use unnecessary jargon;
- Make promises that cannot be kept, or predictions without reasonable basis; or
- Offer goods or services without a reasonable basis for believing it can be delivered.
No matter how small or big a business is, the ACCC and ACL will hold it accountable to its legal obligations.
Final Thoughts
The ACCC action is a reminder to all businesses that they must think carefully about what claims it promotes. Claims cannot be false, misleading or have the effect of misleading consumers. If a business fails to comply with its obligations, there is a risk of the ACCC bringing a costly legal action against them, which will affect its reputation.
Let us know your thoughts on what you think about the ACCC taking legal action against Heinz by tagging us at #lawpath or @lawpath.
