Victoria Honey stung for misleading "honey" and place of origin claims

Penalty

Continuing its recent raft of food labelling prosecutions, the Australian Competition and Consumer Commission (ACCC) last week issued three infringement notices to Basfoods (Aust) Pty Ltd, totalling penalties of $30,600. Basfoods is an Australian company supplying Mediterranean and Turkish foods in Australia.

Conduct

The ACCC found that Basfoods misrepresented its product, "Victoria Honey", breaching the Australian Consumer Law (ACL) in two key ways:

  1. Composition: "Victoria Honey" was not, as claimed, produced by bees, but rather from plant syrup such as corn and sugar cane; and
  2. Place of origin: "Victoria Honey" was not, in fact, a product from Victoria, but rather a product of Turkey.

These misrepresentations were clearly made on both the labelling of "Victoria Honey" tubs and also on the Basfoods website.

Beside the pecuniary penalties, Basfoods has also been required to publish corrective notices in numerous locations, provide an enforceable undertaking to the ACCC that it will only sell a product as honey if it is entirely produced by honey bees and regularly test the composition of all its products. Besides conventional punishment, Basfoods has also seen extensive media buzz from this incident, most notably consumer organisation CHOICE's headline: "'Victoria Honey' not Victorian or honey".

The misrepresentations are also a clear contravention of Standard 2.8.2 of the Food Standards Code which specifically defines honey as a "substance produced by honey bees".  Contraventions of the Food Standards Code carry additional penalties to those under the Australian Consumer Law, including pecuniary penalties up to $275,000 for a corporation, as well as executive liability for a director or other person involved in the management of the offending corporation.  It remains doubtful, however, that any local food authorities will take separate enforcement action against Basfoods in light of the outcome already reached with the ACCC.

What does this mean for you?

This case comes after a number of high profile investigations and penalties into food labelling and marketing. Most recently:

  1. The Federal Court found the Coles supermarket chain breached the ACL in respect of claims that its bread was "Baked Today, Sold Today" and "Freshly Baked" when it was actually partially baked previously (in some cases, months earlier) and then finished off in a Coles oven on the day of sale. While penalties have not been decided, it is expected that Coles faces penalties of up to $1.1 million per contravention. You can read more about the implications of the ACCC v Coles case in our previous client alert.
  2. The Federal Court found Baiada Poultry and Bartter Enterprises(manufacturers of Steggles chicken) breached the ACL by advertising on labelling that their chickens were "free to roam" when they were raised in large barns for the majority of their growth. The companies were ordered to pay $400,000 in fines.
  3. The Federal Court found Pepe's Ducks breached the ACL by advertising on its labelling and other marketing materials (with the use of words and images) that its ducks were raised "open range" and "grown nature's way", when they did not actually spend anytime outdoors. Pepe's Ducks was ordered to pay $375,000 in penalties and $25,000 in costs.

While these penalties were all more significant than the current "Victoria Honey" case, it is important to note that food labelling and advertising is currently well and truly in the ACCC's crosshairs, whether large or small. It also appears that food businesses are closely watching their competitors and are not hesitating to alert local food authorities and/or the ACCC to food labelling that it considers to be misleading or in contravention of the Food Standards Code.  As a manufacturer or supplier of consumer products, you should be careful to verify labels, advertisements, and other marketing material in order to avoid arriving in a similar sticky situation.