Marketing and Advertising
Can a secret spray
keep Covid away?
Is there a cure for the Spread of COVID-19? Lorna Jane
This was the headline for an advertising campaign by Lorna
Jane, who sells activewear.
And what is the cure? It is a secret spray applied to the
fabric, which Lorna Jane called 'LJ Shield'.
In Lorna Jane's own words, from her website: “LJ Shield” is
“a long-lasting, non-toxic shield that helps protect
garments against odour causing bacteria and mould. It is
applied as a water-based, non-toxic mist that adheres to the
fabric to act as a shield of protection for the garment.”
Back in July last year, she added: "LJ Shield completely
eliminates the possibility of spreading any deadly viruses
(and let's face it, the one we're all thinking about is
If activewear garments (leggings, fitness tights, tops,
sports bras – see photo), provide protection against
viruses, then consumers will chose them over garments that
do not. But claiming health benefits is a minefield because
of consumer protection laws.
Lorna Jane got into trouble because it claimed its secret
spray gave protection to its customers against deadly
viruses such as COVID-19, without having scientific evidence
to back up its claims.
The Therapeutic Goods Administration - the health products
regulator fined Lorna Jane $39,960.
The Australian Competition and Consumer Commission - the
consumer advertising watchdog has commenced Federal Court
proceedings for a penalty several times larger, injunctions
and a compliance program.
The Court proceedings will be defended, so the jury is out
on whether a fabric spray can protect against coronavirus.
Lorna Jane has said her argument will be: "We are saying LJ
Shield is an added protection like hand sanitiser but for
the clothes you wear".
For more details click on
Now the ACCC is taking Lorna Jane to
court for false 'anti-virus' advertising
Trivago's bag of tricks exposed
Trivago is a popular website which allows the public to
compare hotel prices.
If you enter your destination and stay dates, a range of
hotel rooms will be displayed. At the top of the list are
the best room rates for like-for-like rooms.
If the traveller clicks on a room price, they will be
redirected to the hotel's booking site to make the booking.
So where does Trivago make its money? Trivago does not
charge a commission to the hotel for the booking. Instead,
Trivago charges the hotel 'pay per click'. The amount hotels
pay per click is left to the hotel, with the incentive being
that the more the hotel offers to pay per click, the higher
the ranking in the search.
Three years ago, the Australian Consumer Watchdog - the ACCC
(Australian Competition and Consumer Commission) - began
investigating misleading practices Trivago used in its
Recently, the Federal Court of Australia found Trivago
guilty of four misrepresentations, or 'tricks'. They were:
- Find cheap hotels on Trivago - The Court
found that the hotel rooms on top of the list were the
cheapest only 33.2% of the time. The reason was that
Trivago's Algorithm favoured hotels which paid higher
fees per click.
- Price comparison - The Court found that the
higher red strike-though price which appeared on top of
the best price was not for a comparable room.
- Highlighting the top room price - The Court
found that Trivago went to great lengths to highlight
the top room price, without making it clear that it was
the top room only because it paid the highest fee per
- The website was transparent - the combination
of 1, 2 & 3 meant that the website was not impartial,
objective and transparent, even though it gave that
For more details on the Federal Court decision, click
How the Trivago online business model failed the Australian
Consumer Law test
Short sighted marketing lands Oscar Wylee in hot water
Oscar Wylee, an optometry and eyewear retailer, targeted
socially-conscious consumers by promising to support
charitable causes. Specifically, they promised that each
time a consumer purchased a pair of spectacles they would
donate a pair to someone in need.
But its actions did not match its promises. They donated
only one pair for every 100 pairs sold.
This landed Oscar Wylee in Court, where it was ordered to
pay a fine of $3.5 million.
The lesson is that the Consumer Regulator, the ACCC, will
use the full force of the Australian Consumer Law to bring
retailers who make false promises into line.
Oscar Wylee accepts $3.5 million penalty for false ‘Pair for
a Pair’ promises
HealthEngine hits legal obstacles
Digital Health and Telehealth are hot technologies during
these pandemic times.
HealthEngine operates Australia's largest online health
marketplace and is a leader in these technologies.
But its business model has hit legal obstacles in recent
The first is patient testimonials, which HealthEngine
doctored to make more favourable to its participating
The second is passing on private patient information to
health insurance brokers in return for a referral fee.
These practices have ceased, but a $2.9 million fine ordered
by the Federal Court of Australia is causing pain.
click on my article:
For viagogo, profit comes before
Rarely have I heard a Judge be so scathing about a party's
misbehaviour as Justice Katzmann was about viagogo! This is
"Viagogo’s responses give it the appearance of being a
company that is indifferent to the interests of Australian
consumers and which prefers to elevate its own profit
motives above those interests, even when on notice of the
potential for harm being done.”
"The representations were on an industrial scale for the
“Viagogo’s corrective action [to change its website] was
taken very late [some time after the delivery of the
liability judgment] and for it was the legal equivalent of
Small wonder the penalty was $7 million.
Can your Lorna Jane gym clothes protect against
What better time to market “anti-virus activewear” than in
the midst of a COVID-19 pandemic?
That's what Lorna Jane, a leading Australian women’s
activewear brand did.
It made three virus protection claims when advertising its
range of sports bras, tights, leggings, tank tops and gym
- Its “anti-virus activewear” prevented and protected
against infectious diseases.
- It launched its “LJ Shield exclusive technology”.
- It had worked for two years to develop a
“chemical-free treatment that when applied to activewear,
protects wearers against viruses and bacteria”.
Trouble was, it did not realise that when making health
claims, it needed to comply with the Australian Therapeutic
Goods Administration Guidelines.
To find out what happened,
click on my article here
Warning bells are ringing for spam emails
Woolworths has been fined $1 million for sending over 5
million spam marketing emails, such as in the image.
The fine was imposed by the spam email watchdog, the
Australian Communications and Media Authority, because
Woolworths failed to process 'unsubscribe' requests within
the 5 day time limit set under Spam Act. In all, 5 million
spam emails were sent - they were spam because they were
sent despite unsubscribe requests.
Woolworths blamed ‘technical and systems issues’, but this
did not change their culpability. They were culpable in
spite of the explanation.
This brings me to the 2 rules to follow when sending
If you want to stay on the right side of the law:
(1) Before sending obtain the customer's consent to join the
mailing list; and
(2) Stop sending when you receive an unsubscribe request.
For more details, click on my article
Woolworths spam emails fail on legal and marketing levels
A Machiavellian plan?
Niccolò Machiavelli is famous for his clever political plans
in his book The Prince written in 1513.
This is the story of a modern day Machiavellian plan.
The scene is a restaurant bearing his name,
Machiavelli Ristorante Italiano in Clarence Street Sydney.
The players are the restaurant manager and the
The plot The players jointly purchased the restaurant
for a price of $850,000, of which $450,000 was paid in cash
to an associate of the seller, which the manager paid, and
$400,000 was paid under a proper Contract, which the
investor partly financed.
The business was awash with cash: the staff wages were paid
in cash stuffed into envelopes, suppliers were paid in cash
and the players paid $1,000 a week to each of their families
in cash. They kept two sets of books - the tax books without
the cash entries and the true books with the cash entries.
The players started to argue. The manager sidelined the
investor by blocking online access to the financial accounts
by making them read-only.
The Machiavellian Plan The investor decided on a plan
to force the manager to buy him out for $600,000 by using
the threat of liquidating the business as his bargaining
lever. The manager refused. The investor went to court to
ask the court appoint a liquidator claiming he was being
oppressed because access to the financial accounts was
The result Justice Black was appalled by the cash
transactions and the tax evasion. He decided not to help
either the investor or the manager and refused to make court
orders for a buy out or for the appointment of a liquidator.
Justice Black would have referred the court file to the
Australian Taxation Office had the parties not voluntarily
disclosed the true position to the ATO before the hearing.
The moral The courts won't help people with
Machiavellian plans if they are running a cash business.
For my case note click on
Don't be a minority shareholder
without a shareholders agreement for protection
What's so hard about setting up a burger business?
Making a burger is so simple - Grill a meat patty on a
barbeque. Add tomato sauce and lettuce, and put it in a roll
and there you have it! Your burger is ready to eat.
A burger business is not so simple. Why not? Because
there is some very serious competition: McDonalds, Hungry
Jacks, Grill'd, and many more. All told, there are more than
10,000 burger shops in Australia.
In 2016, two young players decided to set up a burger
business. Instead of coming up with a new name and concept
they decided to use the name of burger store from the USA
called In N' Out, which had run successful pop-up
events in Australia.
The called it Down N' Out. They copied the menu,
with offerings such as ' Protein Style' and 'Animal Style'
burgers, and 'Not So Secret Menu'.
Not unexpectedly, it has all ended in tears in the
Federal Court of Australia.
The Court has ordered the destruction and delivery up of
all materials bearing the Down N' Out name, the take down of
the Facebook pages and Instagram page, giving up the domain
name and removing the name and logo from its burger bar in
the Sydney CBD. What's more it will pay In N' Out's massive
legal fees and pay compensation.
To answer the question - it's not hard to make a burger.
What is hard when setting up a burger is that you can't copy
anyone else's business, especially when it comes to the
For more click on my article
Court rules against Hashtag Burgers
using Down-N-Out branding pending an appeal
Burger Wars - How In-N-Out Burgers closed down a copycat
Imagine if you had been around in 1904, when burgers
first became popular, and registered 'BURGER' as a trademark
for a meat patty sandwiched in bread.
Today, even a royalty of 0.1 cents per burger would give
you an annual income of $1 billion worldwide. But don't
think of rushing out and registering the word 'Burger' now
because it is too widely used to be registered!
Today, Burger chains use trademarks to protect their name
and the names of their menu items - if you see TM beside a
word or logo on a container, cup or wrapping, you will know
that it has been trademarked.
In-N-Out Burgers has 300 restaurants in California, is a
globally recognised brand and is the 'restaurant of choice'
for celebrities after glamorous affairs such as the Golden
Globes after party. Since 2012, it has held pop-up events in
Sydney, Melbourne and Perth, which has built upon its social
media presence to establish a reputation in Australia. It
has trademarked IN-N-OUT, ANIMAL STYLE and PROTEIN STYLE in
Enter two entrepreneurs who were inspired by an In-N-Out
pop-up and branding decided to hold pop-up events and then
open permanent restaurants, with the trading name Down N'
Out Burgers, with copycat menu items and decor. See the
images of the trademarked names.
As you would expect, In-N-Out issued a cease and desist
letter, which was mostly ignored.
Last week, the Federal Court found that Down N' Out had
acted misleadingly and deceptively, and will order Down N'
Out to remove all offending names and decor and pay
compensation. The Court relied on the fact that Down N' Out
had infringed In-N-Out's trade marks, had been deceptive and
was guilty of passing off.
Trademarks are very powerful - infringe them at your
For my case note on the Federal Court decision click on
Wars: In-N-Out vs Down N' Out.
Four reasons why Trivago hotel room reviews can't be
The Trivago hotel room comparison website was put under
the spotlight by the Federal Court of Australia last week,
and was found wanting! As the Court put it, 'Trivago misled
the public as to the nature, characteristics and suitability
for purpose of the accommodation search service provided by
the Trivago website'.
The Court found that Trivago hotel room reviews can't be
trusted for these four reasons:
- The hotel rooms are reviewed by a secret algorithm.
But just like a cheap pizza is made with few
ingredients, Trivago displays the cheapest hotel room by
inputting only prices in its algorithm - it does not
include non-price attributes such as free breakfast,
refundable tariffs, bed size or pay at check-in as
- The Online Booking Sites pay Trivago a Cost per
Click - a fee each time a customer clicks on their link.
Trivago rewards Booking Sites and Hotels which offer to
pay the most per click with 'Top Deal' status. And
Trivago punishes Booking Sites and Hotels who won't pay
the minimum it demands per click by leaving them out of
the room comparison.
- The hotel room comparisons are not 'like for like'
because the comparisons are not necessarily for the same
room type. A hotel room may be cheaper because it can be
overlooking a carpark, compared with a hotel room which
looks the same internally but is overlooking the sea.
This is not mentioned.
- The 'Top Deal' is displayed is visually appealing
way. It has a relatively large font, has a white space
around it, it is green in colour above a green "View
Deal" button. The comparison rooms are in small grey
font to the left. See the image. Behavioural scientists
said that the time-poor consumer would click the button
without reviewing the comparable rooms.
The Court concluded that in only 33.2% of the time was
the 'Top Deal' highlighted by Trivago the cheapest price.
For a full analysis of the Court's decision, click on my
Cheap rooms? Probably not? Trivago's
top deals are hotels which pay the most
Did you know that your
mobile phone allows Google to track you everywhere you roam?
The Australian Competition & Consumer Commission (ACCC)
has uncovered a hidden setting in Android phones which
allows Google to track your location, even if you have
chosen not to share your location.
In a new legal action in the Federal Court, the ACCC
alleges that Google has acted deceptively:
by creating the impression that 'You're in control' of
your location data by showing a setting in the Location
History section of the Privacy Terms that location tracking
is turned off - ‘Don’t save my Location History in my Google
when in fact another setting - the Web & App Activity
remains turned on and tracks your location, according to
ACCC chair Mr Rod Sims. It is deceptive because the Web &
App Activity setting is kept hidden - there is no warning in
the Location History section that it even exists and it is
hard to find.
Referencing Google's motto of 'Don’t be evil’, the ACCC
alleges that Google has 'caused harm to consumers' by
depriving them of making an informed choice about location
data settings, and by using the data collected for targeted
advertising. Targeted advertising is advertising which is
directed to consumers according to their known preferences
and search engine activity.
So, if you don’t want to receive targeted advertising on
your mobile phone, or want to keep your location private,
switch the Web & App Activity setting to ‘no’.
For more information, click on this link
ACCC wants transparency from Google
about data practices and disclosure for location data
Memo to small business: you
need Google and Facebook for digital marketing
The ACCC Final Report on its Digital platforms Inquiry
has systematically revealed the great power that Google and
Facebook have when it comes to advertising and marketing,
particularly for small businesses.
The Report explains why, using a travel business to
“Online advertising has helped businesses build a brand
and following through social media. In particular, small
businesses have benefited in advertising and reaching
“Customers already using Google Search for generalised
search queries would be inclined to also use Google Search
for specialised search queries, such as information on
travel services, including flights, tours and accommodation,
because users display customer inertia. The same cannot be
said of users of specialised travel services, so this source
of traffic is not available to suppliers of specialised
travel search services.”
“For these reasons, even when specialised search services
have considerable reach, such as travel and hotel booking
search services, Google’s general search service enjoys a
competitive advantage over them.”
While this power explains why small businesses might use
paid advertising on social media, there are other
cost-effective ways to build a social media presence, such
- Invest in a high quality, responsive and
- Work with a qualified digital marketing agency to
ensure you are keeping up to date with the ever-changing
requirements of website design and navigation, SEO,
keywords, user experience, page load times etc.
- Build your brand online by publishing regular,
fresh, relevant and low/no-cost content that is both
helpful and interesting for your customers such as
educational videos, informational blogs, buying guides
and cost calculators
For more details click on my article
How Google and Facebook dominate
online advertising and searches
Is this the end for fake boomerangs?
It's not just plastic boomerangs that are fake. It's
cheap imported boomerangs from South-East Asia such as
Vietnam and Indonesia. If you look at the image, only the
boomerangs at the top right were made in Australia.
It's not generally known, but an extraordinary statistic
that emerged from the evidence given to a recent
Parliamentary Inquiry was that 80% of the souvenirs sold in
Australia purporting to represent First Nations cultures are
in fact imitation products with no connection to Aboriginal
peoples. The Inquiry recommended a new law to protect
Indigenous Cultural Intellectual Property.
In the meantime, the prosecution of Birubi Art, a
significant manufacturer and seller of artefacts with
Australian Aboriginal Designs, was reaching its conclusion
in the Federal Court of Australia.
Justice Perry found that the artefacts, their labelling
and their packaging gave the misleading impression that they
were made in Australia and had been painted by Australian
Aboriginal persons. In fact, 50,000 boomerangs, bullroarers,
didgeridoos and message stones it sold had been painted with
traditional Aboriginal designs in Indonesia by Indonesians.
On 26 June 2019, Justice Perry ordered Birupi Art to pay
a fine of $2.3 million for breaches of the Australian
But it's a Pyrrhic victory, because Ben Wooster, the
owner of Burubi Art had already put the company into
liquidation. Before doing so, he transferred the artefacts
business to a new company. The business is continuing to
operate in Kippa-ring in Queensland. Currently, he is
pursuing clothing sellers for unauthorised use of the
Aboriginal Flag emblem on clothing, claiming exclusive
rights to the emblem from the designer.
We can only hope that this episode will be enough to
prompt the Federal Government into introducing proper
protection for Indigenous Australian culture, especially its
artwork and designs.
For my case note on the Federal Court decision click
Indigenous Australian artistic designs are protected by a
new court ruling
If your flight is delayed or cancelled, the airline must
offer a fare refund
The consumer watchdog, the ACCC has taught Jetstar an
expensive lesson to not discriminate against budget
travellers when it comes to fare refunds.
Jetstar had a 'No Refunds' fare rule for passengers who
booked the basic Jetstar 'Starter fare'. This fare pays for
a seat and carry-on baggage only. If a passenger wants
entertainment, food and flight flexibility (including refund
rights) then they must pay more.
In other words, Jetstar took the view that you get what
you pay for. And even if Jetstar delays or cancels the
flight there are no refunds for 'Starter fare' passengers.
The ACCC took Jetstar to the Federal Court and the Court
fined Jetstar $1.95 million because it is against the
Australian Consumer Law to deny passengers the right to
compensation if an airline cannot provide flights or provide
them within a reasonable time.
As a result, where a flight is delayed by more than 3
hours or cancelled because of weather events, air traffic
control issues, industrial action by a third party, security
issues and so forth, airlines in Australia must:
- Attempt to book on the next available flight they
provide, at no extra cost;
- If they cannot, provide a flight credit or a refund.
For my case note click
No Refunds FareRule costs Jetstar
Voltaren - rubs the ACCC up
the wrong way!
In 2010, the marketing department of Novartis had a
Why not repackage Voltaren Emulgel, which is used for
treating general inflammation and pain of traumatic or
rheumatic origin, as a speciality osteoarthritis treatment?
And why not call it Voltaren Osteo Gel and put on the label
that it is good for mild forms of osteoarthritis of the
knees and fingers, and charge a little more for it?
So, Voltaren Osteo Gel was created - with the same
formula as Voltaren Emulgel but with different packaging
designed to appeal to “those with more years behind them
but still “forever young” who suffer from pain associated
On the other hand, Voltaren Emulgel dropped references to
osteoarthritis and was marketed to an entirely different
group - "the young (or young-at-heart) “weekend warriors”
with sports injuries or strains want[ing] pain relief".
This is differential marketing. It resulted in increased
sales, and worked beautifully until ... the ACCC, the
'national consumer champion', took an interest and took
Novartis and GlaxcoSmithKline (GSK) to the Federal Court,
arguing that to sell the same product in different packaging
was misleading and deceptive contrary to the Australian
GSK admitted that the packaging was misleading, and so it
added the words “Same effective formula as Voltaren Emulgel”
on the Voltaren Osteo Gel packaging (see image). This
addition was enough to no longer make it misleading,
according to the Federal Court.
After it went to Court, GSK did what it might have done
earlier to solve the problem by bringing out a new version -
Osteo Gel 12 Hourly – with twice the concentration of the
active ingredient. The different formulation means it
complies with the Australian Consumer Law.
The 'take out' is that packaging the one product in two
ways is possible, but the packaging must make clear that it
is the same product. Otherwise, the product needs to be
For my case note on the decision click
Voltaren: Is it possible to
differentially market the same product and comply with the
Australian Consumer Law?
Worst ... ever! Can you
remove nasty comments about your business from social media?
Businesses live and die upon word-of-mouth referrals.
Satisfied customers spread the word by making compliments,
but dissatisfied customers spread 'worst ... ever!'
These days, social media spreads word-of-mouth far and
wide: on Facebook, Google, TripAdvisor and many more digital
platforms. Inevitably, negative comments from customers and
competitors will be posted online. Too many negative posts
and reviews online will damage the reputation of the
business, and which may ruin the business.
In this article we take a quick look at the legal
strategy and at the marketing strategy a business can use to
deal with negative comments posted on social media.
Legal Strategy to remove negative comments -
Start by using the Facebook/Google/Tripadvisor reporting
mechanism to flag a post as ‘Hate speech’, ‘hateful’,
‘inappropriate’ or ‘improper’. This can be effective if the
comment is particularly nasty, but it will not work if it
only damages a reputation because criticism is treated as
‘freedom of speech’.
As a fallback strategy, insert a 'non-disparagement
clause' into the terms and conditions of the contract with
the customer. This clause makes it a breach of contract for
a customer to make nasty (disparaging) comments about the
Marketing Strategy to neutralise negative comments -
The marketing strategy starts with setting up online
sites for the business - a webpage, a Facebook page, a
Linkedin page, a Google page, and pages on specialist sites
such as TripAdvisor for hotels and restaurants. This
establishes a strong presence.
The marketing strategy continues with continuous
monitoring - blocking/hiding/removing nasty posts from sites
which are under the control of the business, and by writing
responses to reviews on sites which are not under control
the control of the business.
For more information about the legal strategy,
particularly non-disparagement clauses,
click on my article - Can I remove
negative comments posted on social media using a
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