Sales & Marketing

11 Jun 2008

Do Your Food Labels Accurately Reflect The Product Itself?

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.

Arnott's Biscuits Limited is a manufacturer and supplier of Snack Right biscuits. The Federal Court of Australia held that Arnott's breached the Trade Practices Act 1974, (the Australian equivalent to New Zealand's Fair Trading Act 1986) by engaging in conduct likely to be false, misleading or deceptive. This was in relation to the packaging and labelling of five Snack Right products.

Arnott's created an overall impression by a combination of words and images that the filling in the biscuits consisted predominantly of a particular fruit, when in fact other fruits were dominant. This gave a misleading impression about the contents of the products.

In regards to their 'Apple and Blackberry fruit pillow', there were prominent pictorials of apples and blackberries. Below the name of the product, in smaller letters, it stated, "a delicious golden baked biscuit, crammed with apples, blackberries and sultanas". This labelling represented to consumers that the filling consisted predominantly of apple and blackberry and included a not insubstantial proportion of blackberry.

It was held these representations were misleading and false because the proportion of sultana in the filling was 38.8% and the proportion of apple concentrate was 12.9%. The proportion of dried apple concentrate was 8.6% and 1.7% was blackberry concentrate.

This packaging falsely represented that the biscuits were of a particular composition, namely predominantly apple and blackberry. This was likely to mislead the public as to the nature or characteristics of the biscuit, as in fact the filling was predominantly sultanas. Although the sub-heading stated sultanas were 'crammed' in the biscuit, this was not enough to mitigate the overall impression that a consumer would believe that the biscuit was predominantly apple and blackberry.

Arnott's was ordered to pay the Australian Competition and Consumer Commission (ACCC) costs in the amount of $52,000 and ordered to publish a corrective notice on its website.

The Fair Trading Act 1986

In New Zealand, the Fair Trading Act 1986 (Act) governs, among other things, false, misleading and deceptive claims in relation to advertising and packaging of products. Specifically it prohibits conduct that is likely to mislead "the nature, manufacturing process, characteristics and suitability for a purpose" of goods (section 10). False and misleading representations as to the quality, composition, style or nature of the product are also prohibited (section 13).

This means that a food label will breach the Fair Trading Act, if through words or a pictorial image, that label misleads or deceives a consumer about the characteristics of the food, such as composition, origin, quantity or desirability.

It is also necessary to consider the overall impression created by the labelling and this must not mislead the consumer.

Other Australian examples

In November 2007, the ACCC raised concerns that Go Natural berry/apricot pieces in yoghurt products were misleading. The packaging of these products implied that the products were made from actual whole pieces of berry/apricot coated in yoghurt, when in fact the product was made from a fruit-based mixture consisting predominantly of fruit concentrate (approximately 35%), sugar (approx 30%) and semolina (approx 30%) coated in yoghurt. Natur-all Pty Ltd (trading as Go Natural) agreed to discontinue the use of the name in relation to those products.

The ACCC held that Nestle Australia Pty Ltd's Friskie's Go-Cat Salmon and Oceanfish packaging was misleading. The ACCC said that consumers would think that salmon and oceanfish comprise the major ingredients but its major ingredients were chicken and beef, with a small percentage of salmon. The listing of ingredients on the rear of the label did not correct the more prominent representation on the front of the product. Nestle agreed to relabel the product Friskie's Go-Cat Oceanfish and Salmon flavour'.

Cadbury Schweppes Proprietary Limited conveyed pictorially extracts of real fruit on the packaging of two cordial products, when in fact no extracts of real fruit were contained in the cordial. The "apple kiwi"  flavour used these words in large print and had pictures of both fruit. The Court held this would convey to a reasonable consumer the impression that the cordial contained apple and real kiwifruit. Cadbury Schweppes agreed to re-label their product.

What does this mean for you?

1. These decisions reinforce the Court's long standing position that the overall impression that the packaging creates on a consumer is important.
2. Where a predominant flavour is not included in the labelling, or title of the product, and other less predominant flavours are emphasised, this maybe considered to be misleading and deceptive conduct.
3. The existence of clarifying information which appears elsewhere on a product's packaging may not be enough to correct a misleading impression created by other more prominent statements on the front.

Summary

Truth in labelling is an essential requirement for food products. Consumers must be sufficiently informed as to the ingredients and nature of food products. The prominent representation which is made on the label of the product must accurately reflect the product's ingredients.

Authors

Peter Stubbs

Partner - Corporate & Commercial

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Mobile: +64 21 955 230

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Craig Nelson

Senior Associate - Corporate & Commercial

DDI: +64 9 977 5185

Mobile: +64 21 918 309

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