The global trend towards greater health and wellness has well and truly taken hold in New Zealand, spawning a thriving food and beverage innovation culture. Supermarket and health food store shelves are bursting with products whose labels make claims about the nutrition and health benefits. In order to keep up with this trend, we have a toolbox of laws and regulations guiding, policing and encouraging the correct use of such claims.
New Zealand’s regulators, led by the Commerce Commission and the Ministry of Primary Industries (MPI), work hard to police the standards around the proper substantiation of health and product claims. So how’s that crusade going? This year saw New Zealand move a few steps closer to creating a more robust health claims system with the coming in force of Standard 1.2.7 of the Food Standards Codes governing nutrition, health and related claims. But there’s still a way to go.
Developed by Food Standards Australia New Zealand (FSANZ) and enforced by MPI, Standard 1.2.7 obliges all business who sell food or import it into New Zealand or Australia to provide certain standardised descriptions if they are wanting to make nutrition content and health claims on their products. MPI has taken a strategic approach by first tackling the more serious and obvious examples of non-adherence, relying on the industry and businesses, including competitors, to alert them to breaches – which can be in online advertising or websites, not just on product labels.
But the Standard isn’t just a mechanism to find and punish transgressors; it also aims to foster serious commercial opportunities. A company can make a general level health claim on a food label or advertisement if it meets the Nutrient Profiling Scoring Criterion and it’s based on one of more than 200 food-health relationships approved by FSANZ, or it can apply to add a new food-health relationship to the pre-approved list.
“Self-substantiation” of a commercially important health claim on a product, where the health effect has not been pre-approved by FSANZ, however, must be supported by robust scientific evidence. So far, there have been 37 notified applications for new food-health relationships on the FSANZ website for those wanting to go down this path.
But it’s early days for 1.2.7, and it remains to be seen whether New Zealand businesses are motivated to go through that process and leverage such claims to their commercial advantage, perhaps paving the way for an alternative protection to food patents. To help, MPI has developed an online guide on how it evaluates self-substantiated claims.
Interpretation of 1.2.7 does have some grey areas, as seen in MPI’s recent High Court case against Honey New Zealand (International) Ltd. Honey NZ was effectively stopped from exporting their Manuka Pharm and Manuka Doctor products to certain markets because MPI asserted that the brand names themselves constituted health claims and breached food labelling standards for mānuka honey based on the requirements set out in the Standard. The High Court backed MPI, but the Court of Appeal overturned the ruling for Manuka Doctor arguing the label didn’t state an identifiable health effect. The case tells us the Standard is clearly aimed at claims of specific, measurable health effects although it will be interesting to see how it is applied in the future to trade marks which imply a health effect.
Some high-profile, product claim cases this year also showed that the Fair Trading Act (1986) still dominates the discussion when it comes to the overall impression of the product. The Commerce Commission took Frozen Yoghurt Ltd to Court for implying in their branding that their Yoghurt Storey frozen yoghurt products were made out of real yoghurt, when they actually didn’t even come close to meeting the definition of Yoghurt under the Code. Yoghurt Storey’s website also said eating frozen yoghurt had health benefits – claims that were found to be unsubstantiated and misleading.
The Commerce Commission also continues to tackle "credence claims" which give the impression that a product offers a premium attribute but consumers can't independently verify this, such as "organic" or "environmentally friendly". "Country of origin" claims also remain a common attribute. For many food items, the place of origin of the raw ingredients is likely to be important, unless the product has been significantly changed through the New Zealand manufacturing process and result is quite different from the raw ingredients. That was the case when the Commerce Commission took NZ Nutritionals (2004) Ltd to court over the labelling of certain goats milk health products manufactured in New Zealand as "100 % NZ made" or “New Zealand made". Those claims were found to be misleading and deceptive as consumers might infer the milk was sourced locally when the origin was actually overseas goats.
Across the Tasman, serious public health concerns around misleading origin labelling prompted the Australian Government to introduce a new food origin labelling system and standard on 1 July this year. The label has a simple kangaroo symbol and text and graphics identifying the percentage of Australian ingredients and clarifying where it was produced, grown, made or packed. While this new standard currently only applies in Australia, watch this space – we could see a similar system adopted here.