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 ‘Shredz’ 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 products’ packaging, images of fresh fruit and vegetables beside statements such as ‘99% fruit and veg’. This claim is supported by another statement made on the back cover, which emphasises toddlers will independently discover ‘the delicious taste of nutritious food’.

The ACCC identified that the images and statements deceive consumers into believing the equivalent nutritional value to fruit and vegetables and are a ‘healthy’ 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 “is 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 sugar”. Mr Sims also argued Heinz Shredz products “are likely to inhibit the development of a child’s taste for natural fruit and vegetables and encourage a child to become accustomed to, and develop a preference for, sweet tastes”. Similarly, OPB executive director Jane Martin said Shredz contains 12 grams of sugar per serve, which would take almost an entire day’s worth of added sugar for a two-year-old. Ms Martin said “manufacturers are turning to what sounds like it might be healthy by using sugar from fruit…these sorts of high-sugar aren’t an appropriate food for kids.”

The company continuously denied the ACCC’s 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 ACCC’s 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 “what would a reasonable consumer believe they’re buying?” Mr Sims said the ACCC wants to clearly enforce that major companies have obligations under the Australian Consumer Law to ensure its products’ 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.

Fiona Lu

Fiona is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in information, media, consumer and employment law, her primary focus is on how technology will affect the future of the legal industry.