Marketing and Advertising Law
Court bans fake boomerangs (made
From 2014 to 2017, Birubi Art sold 18,000 boomerangs,
bullroarers, didgeridoos and message stones to tourist
outlets. Priced from $9.95, they were sold as cheap
Birubi Art labelled the artefacts and their boxes as
“genuine Aboriginal Art”, “100% hand painted”, “handcrafted
Australian Boomerang” and “Royalties are paid”.
The reality was different. The objects were made by
artisans in Indonesia; no Australian Aboriginal person was
involved; the only cultural connection was that the designs
were created by Trisha Mason an aboriginal artist (who
Enter the consumer regulator, the ACCC. They prosecuted
Birubi Art for false and misleading representations, namely:
made in Australia and hand painted by an
Australian Aboriginal. On 23 October, 2018, the Federal
Court declared these representations were false in breach of
the Australian Consumer Law.
According to Justice Perry, these artefacts must be made
in Australia because they are traditional Australian
Aboriginal Cultural artefacts. Souvenir sellers and their
suppliers may face prosecution for selling fakes if they are
sourced overseas. And if the label says ‘hand painted’, then
an Aboriginal person must have done or supervised the
painting (i.e. have a more active role than to supply the
A hearing on penalties and orders to be made against
Birubi Art is pending.
For more details click on my case note
boomerang is a fake if it’s not made in Australia (but is
labelled as if it was)
Is the advertising
agency to blame if the advertising campaign flops?
Picture the scene: You are an advertising agency and your
brief is to make a TV Commercial for a shampoo which
restores thinning hair. Let's call the brand évolis.
Your creative team comes up with this script for a "Hers"
commercial: The camera focuses on a woman standing at the
cliff’s edge on a “wild looking coastline during a windstorm
… Her beautiful, long thick mane is flying all over the
place in the wind”. (see image)
You call the campaign "Long Live Hair".
Your advertising budget is $2,000,000 over 12 months. It
covers TV commercials, digital partnerships, influencers and
social media. After just 2 months, the client cancels
because product sales have not increased. The client blames
the advertising agency for the campaign being a complete
flop and refuses to pay.
This scenario is taken from a NSW Supreme Court decision
last week in which the agency (Ikon) sued and recovered from
the client (Advangen) $939,055.65 in unpaid invoices.
This is a summary:
If an advertising agency makes predictions based on
reasonable grounds and if they conduct the advertising
campaign as promised in the Media Plan and the Services
Agreement, then they are not liable for misleading conduct
or for breach of contract.
If an advertising agency has the creative work (the TV
commercials, etc.) signed off by the client, then it is not
responsible if sales targets are not met. The client assumes
the risk of failure.
The agency is not to blame for the failure of an
advertising campaign, and is entitled to receive full
payment for the work done.
For a more detailed analysis click on
my case note Is the advertising agency legally responsible
if the campaign is a complete flop?
Heinz fined $2.25m for selling kids snack food with too much
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
- 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
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
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
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
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
Legal proof that Sugar causes Weight gain and Tooth decay is
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
For more details on the decision,
Too much sugar makes Heinz snack food unhealthy for little
Is Nurofen better than Panadol a fact or just misleading
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
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
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
For my case note on the decision
- Is Nurofen better than Panadol for a headache? The Federal
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,
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
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
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
See Full Article
How the Nurofen Specific Pain
Range marketing strategy was undone as misleading by the
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
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)  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
Is it any wonder that the shopper believes that the bread
displayed was freshly baked on site?
See Full Article
fined 3 cents per loaf for misleading 'par-baked bread'
See Full Article