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H.J. Heinz fined $2.25m for selling kids snack food with too much sugar

Sugar is now on everyone's lips - at least when it comes to talking about excess sugar content in processed foods.

H.J. Heinz got into trouble with the consumer regulator (ACCC) for selling Shredz kids snack food because each stick contained two thirds of the recommended daily intake of
sugar for 1 to 3 year old children (its target market). The sticks were 'jubes' made from highly concentrated fruit juice and vegetable purees.

The ACCC argued that it was misleading and deceptive for H.J. Heinz to give the impression that the Shredz snack food was healthy and nutritious by placing images of smiling children climbing rope ladders into a tree and an apple, pumpkin and other fruit and vegetables on the front label of the packet (see photo), when the Shredz snack food contained too much sugar to be healthy.

The Federal Court agreed with the ACCC, and found that the Shredz snack food was not healthy for 2 year old children because:

  • two thirds of each stick was sugar, which was too much in the diet of a 2 year old; and
     
  • The Federal Court accepted the link between sugar intake and obesity, and the ‘stickiness’ of the sticks with dental caries.

After considering many factors, including that H.J. Heinz ought to have known that the Shredz snack food was unhealthy, the Federal Court imposed a fine of $2.25 million and ordered H.J. Heinz to follow a Compliance Program. Note: Shredz products are no longer on sale.

For more information, click - A sweet victory for the ACCC leaves a sour taste for H.J. Heinz


Meriton in trouble for filtering out negative guest reviews

The long arm of the law has caught Meriton Suites and has fined it $3 million for filtering out negative guest reviews, leaving the favourable reviews of its serviced apartments.
While Meriton is known as a high rise apartment builder, it has 13 high rise serviced apartment buildings in Sydney, Sydney Surrounds, Brisbane and the Gold Coast. The hotel business is proving to be very successful, with 4 more high rise buildings of what it calls Meriton Suites under construction.

By encouraging guests to post reviews on TripAdviser, the world's largest travel website, a hotel can increase its ranking, gain more prominence, and increase bookings. To encourage guest reviews, TripAdvisor provides a service where if a hotel supplies it with the email addresses of its guests and an email template, then it will email the guests and prompt them to write reviews. It is called Review Express.

Meriton Suites knows that to prosper in the highly competitive accommodation industry, it needs to encourage favourable reviews. So it adopted a company policy that the check out clerk would ask "Have you enjoyed your stay?" If the response was negative, they would add 'MSA" to the guest's email address before sending it to TripAdvisor, to ensure it would 'bounce'. And if there was a major service disruption, such as lifts not working, they would not send the email address to TripAdvisor at all.

The Federal Court has held that this is deceptive conduct, in breach of the Australian Consumer Law. Meriton was ordered to pay a $3 million fine, to not engage in manipulating guest reviews for 3 years and to adopt a strict Compliance Policy.

The lesson for Meriton is to say ‘sorry’ and do its best to deal with the complaint.

For more information, click on my case note Meriton Suites fined $3m for manipulating TripAdvisor Reviews


Legal proof that Sugar causes Weight gain and Tooth decay is now available

Adding one teaspoon or two of sugar to tea is normal. Adding 40 teaspoons of sugar to a can or energy drink is also normal. But it won't be normal for much longer.

Here is why:

Last week, the Federal Court gave a landmark decision that high levels of sugar in food are unhealthy because they lead to weight gain and dental caries. This is the first time this link has been made by the courts in Australia.

The decision concerned a Heinz snack food for children aged 1 - 3, called Shredz. The package contained images and words which gave the impression that the food was healthy. There was a young boy climbing a tree, a green apple, strawberries, pumpkin slices and corn kernels. There were statements - 99% fruit and veg, no preservatives and no artificial colours or flavours.

The food sticks inside the packet were high in sugar. It was not added sugar, it was sugar concentrate. Specifically, a high proportion was apple which had been mashed and dehydrated so much that the sugar level was 68.7% by weight. One serve had the equivalent of three teaspoons of sugar.

The Court heard evidence from expert nutritionists and dentists. It relied upon the World Health Organisation Guideline for sugar intake for adults which for a 2 year old child, the daily limit for added sugar / sugar concentrate is three teaspoons.

The Court concluded that the Shredz snack food was unhealthy because a child could be expected to consume more food with added sugar / concentrated sugar during the day, in addition to one serve of Shredz. It was also unhealthy in terms of dental caries because of the high concentration of sugar, and the 'stickiness' of the food sticks.

By formally proving the link between sugar and health, particularly in terms of weight gain, the public health consequences of excessive sugar intake have been emphasized. The momentum is building to restrict the use of sugar in food and drink, and to tax sugar (as many countries have already done).

For more details on the decision, click Too much sugar makes Heinz snack food unhealthy for little children


Is Nurofen better than Panadol a fact or just misleading marketing?

The pain relief market in Australia is lucrative - sales were $580.54 million in the 2015 year in pharmacies, supermarkets, petrol stations and convenience stores.

Reckitt the maker of Nurofen and Glaxco the maker of Panadol have 71% of the pain relief market, in approximately equal shares.

So it comes as no surprise that Reckitt would want to increase its market share in such a lucrative market. Based on a 1996 clinical study, it started a mass-marketing campaign headlined by NUROFEN IS BETTER THAN PARACETAMOL for common headaches.

The overall impression given by the advertising (see the picture), particularly the graph with its bright red line for Nurofen and 4 hour time frame, was that Nurofen delivers faster and more effective relief from pain caused by common headaches than does Panadol or paracetamol.

Glaxco was anxious to defend its market share for Panadol. It decided to take legal proceedings to stop the Nurofen marketing campaign, relying upon the argument that the present state of scientific knowledge did not support the claim that Nurofen was better than Panadol for headaches.

Glaxco was successful in the Federal Court. The Court ruled that claims that Nurofen is better than Panadol for headaches were misleading advertising.

Reckitt will need to find another way to increase its market share!

For my case note on the decision click - Is Nurofen better than Panadol for a headache? The Federal Court decides

 


Is it misleading to charge an extra $3 for Voltarin Osteo Gel?

Look at the picture and you will see the two types of Voltarin Gel that you can buy at a pharmacy or in a supermarket, both of which are described as good For the temporary relief of local pain and inflammation.

Voltarin Emugel is the basic gel, while Voltarin Osteo Gel looks to be superior because this is added to the description associated with mild forms of osteoarthritis of the knees and fingers, and it sells at a higher price - at least $3 higher.

Why then is the Australian Consumer Watchdog - the ACCC - is taking the makers, GSK and Novartis, to the Federal Court claiming that they are misleading the public when they claim Voltaren Osteo Gel is superior to Voltaren Emulgel?

The reason is simple - both types contain exactly the same ingredient - diclofenac gel 11.6mg/g. When the ACCC pointed this out to GSK and Novartis, they added on the Voltaren Osteo Gel label Same effective formula as Voltaren Emulgel. They did not remove the added description associated with mild forms of osteoarthritis .... or remove 'Osteo' from the name.

GSK and Novartis justify the higher price because the Osteo Gel has a large blue triangular cap (see the picture) which is easier to open for arthritis sufferers than the small grooved round cap on the Emulgel tube.

The Federal Court case has only just begun. Watch this space to see whether the Court agrees with the ACCC that the description and the higher price are misleading the public or GSK and Novartis succeed in proving the description and higher price are justified.

For more information click - GSK and Novartis are in hot water for mislabelling Voltaren Osteo Gel to charge a premium price



Is a $6 million fine too low for falsely labelling Nurofen packets?

To recap, what Reckitt Benckiser did between 2011 and 2015 was to sell the identical pain relief product - Nurofen - in 4 differently labelled packets, at almost twice the price of the standard Nurofen packet - see photo.

The Federal Court found that the labels were misleading. The four packets had labels which stated that they were targeted for different pain - one for Migraine Pain, one for Tension Headaches, one for Back Pain and one for Period Pain. In fact, each packet contained the same tablet, and could be taken to relieve any of the pains.

The trial judge fined Reckitt Benckiser $1.7 million which the appeal court increased to $6 million.

The question is - was the fine still too low considering that sales were about $45 million, with at least $20 million in profit? In other words, is a fine of $6 million high enough to discourage it hapening again, or is it too low and so will it be considered just the cost of doing business?

Belatedly, the Australian Competition and Consumer Commission which had asked for the $6 million fine agrees. It now proposes that fines based on profits derived from the offending conduct - as high as 3 times the profits.

Too late for the Nurofen case - the horse has bolted!

For a detailed analysis click - Higher penalties are coming for conscious breaches of the Australian Consumer Law


What happens to the seller if the oregano you buy is 50% olive leaf?

Dried oregano gives a spicy Mediterranean flavour to tomato, pizza, beans and lamb.

It was therefore a matter of great concern when the Australian consumer watchdog, the ACCC, tested packages labelled Oregano, 100% Oregano and pure Oregano and found impurities, mainly olive leaf.

While oregano does grow around olive trees, to have 50% of the package consisting of olive leaves is more than just a coincidence! It was proof positive for the ACCC to pursue suppliers and retailers who marketed the oregano for misleading the public.

And so it was that the ACCC has punished the oregano suppliers and retailers for not taking precautions to ensure that the oregano they sold was unadulterated.

Some were reprimanded after taking action to remedy the misrepresentation, others provided court enforceable undertakings to test the products for 3 years, and Hoyt's Foods was fined $10,800. They were all 'named and shamed' by the ACCC in media releases.

For more detail, click - ACCC protects consumers against false marketing of oregano


There’s no such thing as a free bet in Australia

Free drinks, free coffee, free samples, free admission ... all these offers use the word free to catch the attention of the customer to sell a service or product.

So it was that the online gambling company, Bet365 decided to use the phrase $200 FREE BETS FOR NEW CUSTOMERS on the Opening Page of its website. It was very successful - active users increased by 83% over the previous year and wagering revenues increased fourfold.

There was only one problem - when they posted the FREE BETS phrase, they put an asterisk after the word CUSTOMERS*, but did not put a click through button '*Terms & Conditions Apply' underneath. Had they done so, then the new customer have learned that they could only claim $200 in free bets if they staked three times that amount and could withdraw their winnings only if other conditions were satisfied.

Bet365 were prosecuted by the Australian Consumer Regulator, the ACCC, because Bet365 had displayed the FREE BETS phrase on its website without the Terms & Conditions click through button for 302 days. The Federal Court found that this was likely to mislead consumers and fined the two Bet365 companies involved a total of $2,750,000 for breaching the Australian Consumer Law.

There are two lessons here - for the consumer, there is no such thing as a free bet (or anything else) because terms and conditions apply; and for businesses, to make sure that the terms and conditions which apply to free offers are available to the consumer at the point where the free offer is displayed.

For more information from a legal perspective, and for Michael Field's comments from a marketing perspective, click - There's no such thing as a free bet in Australia


Did you know that all Nurofen Specific Pain Range tablets have the same active ingredient?

Would you be angry if you were told that despite the label "Migraine Pain' and the distinctive violet packet, the tablet you are buying is exactly the same as the one in in the green packet labelled 'Back Pain' or the burgundy packet "Tension Headache' or the magenta packet 'Period Pain'?

The Australian Consumer & Competition Commission became so angry with the makers of Nurofen, Reckitt Benckiser, that last year they prosecuted them for misleading labelling, in breach of the Australian Consumer Law.

Last week, the Federal Court ordered Reckitt Benckiser to pay a fine of $1.7 million for its misleading packaging and website. In addition, they were ordered to change their packaging to make it clear that the tablet was suitable for the relief of all kinds of pain.

So, next time you are in a pharmacy or supermarket looking around for a pain relief medication, look at the Nurofen Specific Pain Range packets, see how they are labelled as good for specific pain, and notice how they all contain the same active ingredient - ibuprofen lysine 342 mg

See Full Article


How the Nurofen Specific Pain Range marketing strategy was undone as misleading by the ACCC

It was a brilliant marketing strategy … instead of marketing the fast-acting Nurofen for pain relief as one product effective for a range of pains (as the standard Nurofen is marketed), to market it as four products targeted to specific pains, namely migraine pain, tension headache, period pain and back pain. It’s known as segmenting the market.

This marketing strategy was undone as misleading as a result of the recent decision of the Federal Court of Australia (Edelman J) in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 4) [2015] FCA 1408 (11 December 2015).

See Full Article


Not Everything Is Fresh Today!

Coles Supermarkets position fresh fruit, fresh cut flowers and fresh vegetables at the entrance to give shoppers the impression of entering into a natural oasis where everything is fresh today.  

As the shopper passes by the fresh produce displays, according to the Coles website they see the “golden baked crust” and smell “tempting aromas” of the fresh bread displays below the “Baked Today, Sold Today” signage at the “Coles Bakery”.

Is it any wonder that the shopper believes that the bread displayed was freshly baked on site?

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Coles fined 3 cents per loaf for misleading 'par-baked bread' marketing

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