Simpson Grierson's Sales & Marketing Law Group provides practical advice on all legal issues surrounding the delivery of goods and services to the marketplace. The Group answers questions for NZ Marketing Magazine on a bi-monthly basis and this column is republished on our website and sent to relevant clients.
With no public announcement, the Dietary Supplements Regulations (DSRs) have been amended. The amendment, coming into force on 31 March this year, includes:
a change to the definition of a dietary supplement to "confine a dietary supplement to a therapeutic-type product".
an increase in the amount of folic acid that can be used in a dietary supplement (subject to being prepared via Good Manufacturing Practice).
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Tis the season to be ... providing refunds? Christmas, it's the season for gift giving and gift receiving. A time where gifts are thoughtfully picked. A time where loved ones are grateful for whatever they receive. After all, it's the 'thought that counts'. But is it? Nowadays, it seems it's more the time for gift returning and exchanging, especially when the Boxing Day sales come around.
But what are the legal obligations surrounding guarantees of goods purchased? Can consumers return that Frosty the Snowman jumper simply because they don't like it? Would it be any different if there was a great big hole in the sleeve? When can consumers return goods and under what situations do you, as a manufacturer or supplier, have to provide a refund or exchange?
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Organic food fraud big business or big trouble? Think you can get away with organic food fraud? Think again.
The director of a British food supplier falsely described
£500,000 (about NZ $1.1 million) of products as being
"organic". His punishment? Just over two years in jail.
Organic food is now huge business. From muddy potatoes to
GM-free chicken, consumers are prepared to pay more for
organic produce. In New Zealand alone the 2008 organic
food market was worth $250 million, with exports earning
between $120 and $130 million. World-wide, the organic
food industry is now worth over US$46 billion a year.
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The telephone rings. On the other end is a panicked employee telling you that a series of complaints have been overlooked. The complaints show that after using your product, consumers have been hurt. Online blogs are blaming your company.
Straight away meetings are called. Decisions must be made with lightning speed. What are your options? Do you instigate an expensive product recall or risk taking no action? Any decisions you do make will impact on your company's reputation and profit.
A hypothetical scenario? Maybe, but this could happen to any supplier regardless of size or product type. What are your options if this situation turns into a reality for you?
This FYI provides guidance on how an effective product recall should be carried out in New Zealand. It explains what can be done to minimise the risk of this happening to you and what your legal obligations are.
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Consumer Law: is radical reform set to jump the ditch? Sep 2009 Just across the Tasman the Australian Government is reforming consumer law. The wide-ranging changes will impose new burdens on manufacturers and suppliers. The Australian Government says this will save its consumers up to AUD$4.5 billion a year.
These changes will have a run-on effect for Kiwi businesses – and not just those operating in Australia. A similar scoping exercise is already under way in New Zealand, which may well follow Australia's lead as part of a push to harmonise trans-Tasman law. Such a change will affect all New Zealand businesses who deal directly with consumers.
This FYI briefly introduces the proposed Australian model to you, focuses on what "unfair terms" are, and looks at what the changes across the ditch mean for your business in New Zealand.
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Made In New Zealand? Yeah Right! Aug 2009 If a product is marketed as "made in New Zealand" or has its country of origin recorded as "New Zealand" there is no doubt that this attracts consumers who in many instances are prepared to pay a premium for New Zealand made products. These consumers are often influenced by the belief that 'New Zealand made' is of a better quality or, are making a conscious decision to support local industry. The last year has seen a string of investigations by the Commerce Commission (Commission) under The Fair Trading Act 1986 (Act) for falsely claiming products were "New Zealand made".
This FYI will consider the importance of the decisions and also discuss practical ways businesses can avoid the wrath of the Commission and breaches of the Act..
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Whatever your industry, whether you are a private, public or not for profit organisation a compliance programme is an essential tool to help you make more money and keep the money you have made. The consequences of failing to comply can severely damage your business and brand. On 24 June 2009, Standards New Zealand introduced the Compliance Standard to New Zealand, NZS/AS 3806:2006 (Standard). The Standard, which originated in Australia, has been adopted in New Zealand as "a voluntary guide for organisations to customise and develop their own compliance system". The Standard essentially provides a benchmark for setting up a compliance programme.
In this FYI we look at the history of the Standard in Australia, how it was criticised and revised before being adopted by Standards New Zealand. We will also examine how the Standard has been used by regulatory authorities in Australia as part of their enforcement powers. It is expected that regulatory authorities in New Zealand (and in particular the Commerce Commission (Commission)) will try to force the adoption of stringent and costly compliance programmes as part of their enforcement powers. Organisations can avoid this by putting in place an effective, less costly, compliance programme now.
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Dare to Compare Jun 2009 Comparative advertising (or advertising that identifies a competing product or service) is not every marketers ideal form of advertising. However, if done properly comparative advertising can prove to be highly successful. This FYI will offer some practical do's and don'ts and will consider recent decisions from New Zealand, Australia and England.
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Product Stewardship under the Waste Minimisation Act Will it apply to you? May 2009 Since the Waste Minimisation Act (Act) came into force in September 2008, the Ministry for the Environment (MfE) has begun the process of implementing the Act, starting with a focus on product stewardship. Step one in this process is to determine what products should be declared "priority products" due to their potential environmental impact and then require potentially costly and mandatory product stewardship schemes to be developed to reduce the environmental impact of those products.
In this FYI, we explore how the product stewardship requirements under the Act may impact your business and how you can have your say on them.
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The Warehouse Decision: A Bargain? Apr 2009 The Warehouse Limited recently gained unwanted attention when the Commerce Commission issued proceedings, resulting in The Warehouse pleading guilty to numerous breaches of The Fair Trading Act (Act) and total fines of $209,600. This FYI describes what was wrong with the advertising, takes lessons from the decision and considers whether or not the Court went far enough.
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'Greenwashing' or 'Wishwashing': A look into the proposed guidelines for carbon claims Mar 2009 Hard on the heels of the Commerce Commission's (Commission) 'Green Marketing' guidelines issued in December last year, the Commission recently released draft
guidelines (Guidelines) surrounding carbon offset and neutrality claims. The Guidelines are based on an Australian model and will affect all in business who supply, distribute, sell or market a product or service and who make any claims as to a product or services' carbon neutrality, carbon offset,or footprint. This FYI will look at the proposed form of those Guidelines, how they stand to affect your business, and provide an opportunity for us to assist you in having your say.
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The Progressive decision. For whom? Feb 2009 Your business runs a promotion offering consumers the chance to win a prize or gift. What do you do when the offer has closed? Do you (a) keep displaying the promotional material, after all it might continue to bolster sales? Or (b) make sure you have plans to remove the promotional material? Given it is an offence to make such an offer and intend not to honour it, you might think the answer straightforward. A recent High Court decision confirms that it is, but the decision also throws an unexpected lifeline to large organisations charged with the offence. Is the lifeline deserved?
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'Green' Claims: turning over a new leaf in 2009 Dec 2008 Last Thursday the New Zealand Commerce Commission (Commission) released guidelines for 'Green Marketing'. 2008 has seen consumers worldwide experience an increase in claims that household products ranging from toilet paper to whiteware are 'environmentally friendly' or 'Green' or 'carbon neutral'. The list of items marketed as 'Green' has also extended to larger ticket items such as cars, computers and televisions. Such claims are often the main point of differentiation between competing products and are a powerful marketing tool. This article highlights key points contained in the guidelines and will help you avoid an investigation.
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Thinking of making a 'Grrrrrreen' claim - then think twice Oct 2008 If two recent investigations by the Australian Competition and Consumer Commission (Commission) (Australia's equivalent to the New Zealand Commerce Commission) are anything to go by those making 'green' claims should sit up and take notice.
Two Australian advertisements recently came under fire in legislation equivalent to New Zealand's Fair Trading Act.
The first was the campaign launched by V8 Supercars Australia Pty Ltd (Company) regarding the 2007 Australian V8 Championship Series (V8 Series). The Company advertised “This year we're planting more than our foot” and announced it would plant 15,000 native trees to fully offset the carbon emissions from the V8 Series. The second string of advertisements to come under scrutiny were those by GM Holden (GM Holden) claiming that select motor vehicles in the Saab range were “Grrrrrreen” and, amongst other things, that “Every Saab is green”.
This article will discuss each of the advertisements and the claims made in them and consider their importance to New Zealand manufacturers and advertisers.
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Proposed New Rules for Supplemented Food Sep 2008 If you import, manufacture, label, or advertise supplemented food then take note. The New Zealand Food Safety Authority (NZFSA) proposes introducing a new standard for supplemented food Standard).
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'Rugby Superstars' Bluebird chips promotion Jul 2008 Warning! The snack food industry must pay particular attention to a recent decision by the Advertising Standards Complaints Board (ASCB). A snack food manufacturer used a short term competitive marketing strategy designed to encourage a person to buy their brand of snack food over another. They included 'Rugby Superstar' collector cards in specially marked chip packets. The ASCB found that this promotion breached a number of Advertising Codes.
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Do Your Food Labels Accurately Reflect The Product Itself? Jun 2008 Consumers are becoming increasingly concerned about the contents of the food they eat. Food manufacturers must ensure the packaging and labelling gives consumers sufficient information to make informed decisions. In April 2008, the Federal Court of Australia declared a number of Arnott's biscuits' packaging to be misleading. In light of this recent decision, we review the importance of the overall impression that food packaging creates on the consumer.
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Waste, Reduce, Recycle: Waste Minimisation Bill May 2008 Most products will create waste, either from the packaging or the product itself. The Local Government and Environmental Select Committee has recently recommended that the Waste Minimisation Bill be passed, but with significant amendments to the original draft.
The Bill aims to reduce the amount of waste sent to landfills, introduce a levy on waste and foster the development of product stewarding schemes.
This article will briefly outline relevant provisions and discuss how they may affect industry, in particular businesses that sell disposable products or provide packaged goods to New Zealand.
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Public Health Bill Mar 2008 The Public Health Bill is a major legislative reform which reviews and updates the Health Act 1956. The public submissions period closed on 7 March.
The purpose of the Bill is to improve, promote, and protect public health in order to help attain optimal and equitable health outcomes for Maori and all other population groups (clause 3). There is nothing controversial about that. But what is controversial is the attempt to manage by legislation the risks of non-communicable diseases such as cancer, diabetes and cardiovascular disease. There are two main provisions in the Bill which relate to non-communicable diseases.
These are Part 3 and clauses 374(r) and (x). In this FYI, we briefly outline these provisions and discuss how and why they are causing concerns to the food industry.
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FYI Sales & Marketing: Historical Columns Jun 2005 Simpson Grierson's Sales & Marketing Law Group has been a regular contributor to "NZ Marketing Magazine" since 1994, writing on marketing law in New Zealand. > Read More
