A recent High Court case shows companies need to take extra care when claiming their products are New Zealand made, an intellectual property expert says.
In the case, health products business New Zealand Nutritionals (NZ Nutritionals) was ruled to have breached the Fair Trading Act with misleading and deceptive labelling and marketing of goat’s milk products, including statements they were ‘100% NZ made’.
James & Wells Partner Gus Hazel says the case highlights that country of origin claims such as ‘NZ made’ can be a tricky area.
“While the products were manufactured in Christchurch, the majority of the ingredients, including goat’s milk powder, were imported from overseas. The Commerce Commission alleged consumers would be led to believe the goats milk was sourced from goats milked in New Zealand,” he says.
“NZ Nutritionals argued that producing and packaging the products within New Zealand, meant that the ‘100% NZ Made’ claims were not misleading or deceptive. However, Justice Venning ruled that the goat’s milk powder was such a significant part of the product that where it was produced was important.”
Hazel says the case offers some useful commentary on the issue of product labelling, with particular reference to food or nutritional products.
“For producers of food and nutritional products there are important lessons here. Firstly, it would be prudent for producers to undertake an audit of the source of ingredients in their products.
“Secondly, producers also need to consider the importance of the ingredients in relation to the nature and characteristics of the products. They need to get into the heads of consumers, because the NZ Nutritionals case shows consumer perception is a key factor to consider.”
These considerations are important in relation to the Fair Trading Act, but that is not the only piece of legislation natural product producers may need to consider, Hazel says.
“As of January this year, food and beverage companies also need to be aware that any claims towards nutrients or health effects on product labels (or any promotional material) must meet criteria set out within Standard 1.2.7 of the Food Standards Code.
“While this is a compliance requirement which MPI is taking very seriously, Standard 1.2.7 also offers significant commercial opportunity to add value to products in the nutritional and health food sector.”