The Federal Court has linked sugar in food with weight gain and dental caries in a landmark decision that a Heinz snack food was not beneficial to children’s health because it had high levels of sugar.
The decision is: Australian Competition and Consumer Commission v H. J. Heinz Company Australia Limited  FCA 360, a judgment of Justice White, Federal Court of Australia, on 19 March 2018.
The key finding was that the packaging of the Shredz fruit & veg products conveyed the impression that the products were beneficial to the health of children aged 1-3 years, which was misleading because they contained approximately two-thirds sugar (by weight).
Was the Healthy Food Representation conveyed by the packaging?
Under the Australian Consumer Law product packaging must not be misleading or deceptive (s. 18(1)) or be false or misleading as to the benefits of the product (s. 29(1)(g)).
Heinz sold three “Heinz Little Kids fruit & veg SHREDZ” products, a Berries Product, a Peach Product and a Fruit and Chia Product. They were sold in a light cardboard box which contained five packets, each with several sticks of the products. The sticks were similar in texture and taste to confectionary jubes, with a stickiness similar to that of dried fruit.
The Court was satisfied that the packaging conveyed a representation that the Berries Product was a nutritious food and beneficial for the health of children aged 1-3 years (the “Healthy Food Representation”) and that a not insignificant number of ordinary reasonable consumers would have understood it in this way. (p 104, judgment)
The words ‘beneficial for the health of children’ were not printed on the packaging. Instead, the Court concluded that the packaging gave the overall impression that the product was ‘beneficial for the health of children’ through a combination of:
- the imagery of an active healthy young boy engaged in tree climbing in conjunction with the prominent pictures of wholesome fresh fruit and vegetables; The tree itself conveys an image of natural and healthy growth; and
- the words the Berries Product comprises 99% fruit and vegetables and is appropriate for toddlers “on the go” reinforced by the statements no preservatives and no artificial colours or flavours.
(p 100, judgment)
The packaging is reproduced below (Annexure A, judgment)
Was the Healthy Food Representation false or misleading?
The ingredients of the Berries Product were apple paste, apple juice concentrate, berry purees, raspberry puree, sweetcorn puree, pumpkin puree and natural flavours. The principal ingredient was apple paste (36%). … The process was … the mashing of peeled and cored apples followed by dehydration until the product had the viscosity of a paste. Ascorbic acid was then added to avoid browning of the paste.
All ingredients were concentrated / dehydrated. The effect of the dehydration of the ingredients was to increase the amount of sugar as an overall proportion of ingredients (to 68.27%). (p 135, 136, 150, judgment)
The Court considered evidence from expert nutritionists and paediatric dentists in finding that the Healthy Food Representation was false or misleading because of the high sugar level in the Berries Product:
- The World Health Organisation (WHO) 2015 Guideline: “Sugars intake for adults and children” which contains a “strong recommendation” that the intake of “free sugars” be reduced to less than 10% of total energy intake, being the sum of all daily calories/kilojoules consumed from food and drink. In addition, the WHO Guidelines contain a “conditional recommendation” that the intake of “free sugars” be further limited to below 5% of the total energy intake.
Note: the WHO Guidelines definition of “free sugars” is: Free sugars include monosaccharides and disaccharides added to foods and beverages by the manufacturer, cook or consumer, and sugars naturally present in honey, syrups, fruit juices and fruit juice concentrates. (p 155, 159, judgment)
The Court viewed the WHO Guidelines as at the heart of the ACCC case and considered them authoritative.
- There was evidence that 25% of Australian children are overweight or obese and evidence supporting the association between the consumption of free sugars by children and weight gain. (p 149, judgment)
- A single serve of the Berries Product was the equivalent of three teaspoons of free sugars, which was equal to the recommended intake (5% of daily intake) of free sugars by two year olds. Note: 1 teaspoon = 16 calories = 4.2g. It was unhealthy given the probability, if not the inevitability, of children consuming free sugars in the rest of their daily diet. (p 161, judgment)
- It is not easy to accept that consumption of that amount of sugar in a single snack can be regarded as beneficial to the health of 1-3 year olds. That is especially so given that excess weight and obesity is a significant problem among Australian children, as the statistics indicate and having regard to the role of sugars in the development of dental caries. (p 236, judgment)
- The evidence satisfies me that dental caries is a major problem among young children, that foods with high sugar content, especially those which are retained in the mouth are a significant cause of dental caries, and that the Berries Product is of that kind. In turn, it warrants the conclusion that consumption of the Berries Product cannot be regarded as beneficial from the perspective of dental health (even though it) can be mitigated, and perhaps avoided, by good oral hygiene practices. (p 231, judgment)
The Court found that Heinz ought to have known that the representation that the Products were beneficial to the health of children aged 1-3 years was false or misleading. The Heinz internal documents showed that Heinz intended to promote the products as nutritious and healthy.
The Court foreshadowed it will make declarations that Heinz has contravened the Australian Consumer Law.
- The finding applied not only to the Berries Product, but also to the Peach Product and a Fruit and Chia Product, despite small differences in ingredients.
- Heinz ceased to sell the products in May 2016, shortly before the proceedings were commenced.
- The ACCC failed to prove that two other representations were false and misleading, namely that the packaging conveyed that the products were nutritional or of equivalent nutritional value to the natural fruit and vegetables depicted on the packaging; and that the products would encourage the development of healthy eating habits for children aged 1-3 years.
The link between free sugar and unhealthy weight gain is an important public health issue. Type 2 diabetes in children is rising as a result of poor dietary habits.
What the ACCC has done is to demonstrate this link to the satisfaction of the Court because the packaging gave the impression that the food was a healthy snack food for young children.
The ACCC is entitled to bask in its success - “We welcome the Court’s decision today which shows that businesses that make false or misleading claims about the health benefits of products face serious consequences,” ACCC Acting Chair Delia Rickard said (see media release).
But the ACCC cannot rest on its laurels. It should be starting work immediately to put suppliers of products with high sugar levels sold to children and adults on notice that they cannot give the impression of providing health benefits. Prime examples are energy drinks where one small can may contain enough free sugar for 10% to 15% of daily energy requirements of an adult (exceeding the WHO recommended limit of 10%).
Marketing commentary by Michael Field, EvettField Partners www.evettfield.com
Parents of children are busy managing competing priorities and are often under time pressure. They may not have the time to read the full ingredients list or nutritional information printed on every packet of food before they purchase. They rely on the information on the front of the packet.
Historically, the typical purchase decision drivers were based primarily on taste, price, and convenience. These are quickly being replaced by the new ‘evolving drivers’ such as Health & Wellness; Safety; Social impact; Experience and Transparency.
Consumer brands must keep up with rapidly evolving customer buying behaviour and changing market expectations to not only maintain their dominant market positions – but to remain relevant to their customers who demand honesty and transparency from the brands they choose.
In this instance, Heinz failed to meet their legal requirements and in effect failed to meet the reasonable expectation of consumers to rely on the information provided by the manufacturer, which is designed to influence their purchase decision.
Supermarket aisles are bulging with products targeted at children, laden with sugar and marketed by dubious claims about health and nutrition.
I am surprised that the ACCC has not addressed this issue earlier, and as a parent and a marketer, I hope they go further and target more broadly, including the energy drink market which targets the teen market.