NEW ZEALAND
Update on the Consumer Law Reform Bill
1. The Consumer Law Reform Bill is currently in Select Committee Stage. The Bill is currently at number 21 on the Parliamentary Order Paper. The Order Paper
determines the order that Parliament proposes to deal with different pieces of proposed legislation. Although the Bill appears to be low on the Government’s priority list, in our experience Bills can jump rapidly up the Order Paper.
2. The Government released a Supplementary Order Paper (SOP) for the Consumer Law Reform Bill on July 10. SOPs set out proposed amendments to a bill. SOP No. 273 adds the following relevant changes to the Bill:
(a) Delaying commencement of the contracting out provisions until 6 months after Royal assent;
(b) Delaying commencement of the unfair contract term provisions until 15 months after Royal assent;
(c) In relation to voluntary recalls of goods, new section 31A (which requires suppliers to notify the Chief Executive of the Ministry of Consumer Affairs in the event of a voluntary recall) applies only if there is no other requirement to report to a government agency or if there is no other requirement to take any action in relation to those goods;
(d) Inserts the following clause affecting the Consumer Guarantees Act 1993:
“5A Guarantee as to delivery
(1) Where a supplier is responsible for delivering, or for arranging for the delivery of, goods to a consumer there is a guarantee that the goods will be received by the consumer—
(a) at a time, or within a period, agreed between the supplier and the consumer; or
(b) if no time or period has been agreed, within a reasonable time.
(2) Where the delivery of the goods fails to comply with the guarantee under this section, Part 2 gives the consumer a right of redress against the supplier and, in that case, the consumer may,—
(a) if the failure is of a substantial character, reject the goods under section 18(3); and
(b) in any case, obtain damages under section 18(4) (other than damages relating to the remedies set out in section 18(2)), whether or not the consumer also rejects the goods.
(3) For the purposes of this section, the reference in section 20(1)(b) to an agent of the supplier
must be treated as including any carrier or other person who undertakes to deliver the goods on behalf of the supplier.
(4) A consumer’s rights of redress under Part 2 in relation to the guarantee under this section are limited to those specified in subsection (2)”
3. The SOP can be found here.
4. If you would like further information on the reforms proposed under the Consumer Law Reform Bill please do not hesitate to contact us.
July 11: Supplementary Order Paper for the Food Bill released
5. SOP No. 278 was released on July 11. The Food Bill is currently in Committee.
6. SOP No. 278 is largely aimed at addressing concerns that the Bill may place unnecessary regulation and compliance on community and fundraising groups.
7. However, the SOP proposes to introduce a reference into the Bill regarding genetically modified (GM) foods. The reference is aimed at making it clear that the New Zealand Government has the ability to make New Zealand-only standards relating to GM food in the exceptional circumstances set out in the Food Treaty with Australia.
8. The Food Bill supports the existing robust scientific
pre-approval process required prior to GM foods being allowed for sale.
9. The SOP also proposes the introduction of a new section that will allow for regulations to ensure local councils only charge fees that are reasonable.
10. The SOP can be found here.
July 25: Proposed Amendment to the New Zealand (Supplemented Food) Standard 2010 discussion paper released
11. A discussion paper was released on 25 July 2013 to seek comment from the public on a proposal to review the Supplemented Food Standard (SFS) to:
(a) incorporate by reference the new Standard 1.2.7— Nutrition, Health and Related Claims of the Food Standard Code (which will allow supplemented foods to make health claims in accordance with Standard 1.2.7—Standard 1.2.7 regulates the voluntary use
of nutrition content claims, health claims and endorsements); and
(b) to clarify the application of the SFS to foods containing added caffeine to maintain the status quo for caffeine regulation in NZ.
12. Notable amendments to the SFS proposed by the Ministry for Primary Industries:
(a) a prohibition on content claims that compare vitamin or mineral content of one food with another (for example, “higher in vitamin C compared with X”);
(b) clarification of the application of the SFS to foods containing caffeine by providing that supplemented food products can contain added caffeine for a purpose other than as a food additive (for example, as an ingredient)
13. Submissions closed on 28 August 2013.
14. The Proposed Amendment discussion paper can be found here.
July 29: Commerce Commission’s request for wider powers under the Consumer Law Reform Bill denied
15. The Commerce Select Committee has rejected a submission from the Commerce Commission asking for wider powers to be added to the Consumer Law Reform Bill.
16. The Commerce Commission asked for powers comparable to the Australian Competition and Consumer Commission’s (ACCC) powers to issue infringement
notices and fines to be added to the Bill because the infringement notices give the ACCC a quick, low-cost way of tackling matters it might otherwise have to ignore or fight in expensive court actions.
17. The ACCC currently has the ability to issue infringement notices and fines, akin to speeding tickets. The ACCC handed out six infringement notices totalling A$61,200 (NZ$71,000) paid by Australia’s Coles supermarkets in July for allegedly displaying imported fruit under an “Australian-grown” symbol.
18. An article on the Commerce Commission’s submission can be found here.
August 12: Enzyme below added to Standard 1.3.3 of the Australia New Zealand Food Standards Code as a permitted enzyme of microbial origin that can be used as a processing aid:
Enzyme Source
-Fructofuranosidase Aspergillus niger
EC 3.2.1.26 Saccharomyces cerevisiae
September 12: Food Minister Nikki Kaye initiates consultation process on creating a single set of standards for manuka honey labelling in New Zealand
19. The consultation process ran for three weeks and closed on September 30. Food Minister Nikki Kaye encouraged the industry, scientists and interested stakeholders to have their say.
20. A draft guideline was expected to be released in October but its release has been delayed until “mid-November” in order to give stakeholders a chance to comment on it before it is finally public.
21. The outcome of the consultation will be developed into draft labelling guidelines that will be tested with industry before they are finalised and published.
22. The Ministry of Primary Industries created a discussion paper outlining three options for defining manuka honey and the Ministry sought data from the industry to help choose the best option. The discussion paper can be found here.
23. The proposed guidelines are aimed at making sure that New Zealand manuka honey label claims are correct and can be substantiated by science.
24. The proposed development of these guidelines was stimulated by Britain’s Food Standards Agency issuing a nationwide alert to all trading standards departments in Britain, asking them to watch out for honey labelled
as manuka but derived from other sources. There have been concerns that many of the manuka-labelled honeys do not have “non-peroxide” anti-microbial activity that
is unique to genuine manuka honey and commands a much higher market value than regular honey.
25. The New Zealand Unique Manuka Factor Honey Association (UMFHA) commissioned tests of manuka honey samples in 2012 and also this year in Britain, China and Singapore. Of 73 samples tested, 41 showed no non-peroxide activity. Separate tests in Hong Kong found that of 55 manuka honeys sampled, 14 had been contaminated with syrup.
26. The manuka honey industry in New Zealand is worth around $120 million.
27. An article on the manuka honey standards can be found
here.
September 28: Ministry of Primary Industries releases consultation on draft notice under the Wine Act 2003
28. MPI sought submissions from interested parties on a draft Notice. The proposed legislation aims to provide an exemption from export requirements for commercial samples of fruit wine, cider, mead, wine product and non-New Zealand grape wine. This exemption will enable exporters of these products to send samples
to explore potential markets without the need for exporter registration. There are no changes to legislative requirements for fruit wine, cider and mead making.
29. Submissions closed on 18 October 2013.
30. The consultation document can be found here.
October 1: The Commerce Commission publishes its revised Enforcement Response Guidelines, which now include new ‘Criminal Prosecutions Guidelines’
31. The Enforcement Response Guidelines (ERG) were originally released in November 2012 and are designed to help New Zealanders understand more about how the Commission’s Competition Branch enforces its consumer and competition legislation. They also explain what enforcement responses are available to the Commission, and what criteria and considerations are taken into account when deciding which response to use.
32. The Criminal Prosecution Guidelines provide additional guidance on the circumstances in which the Commission will initiate a criminal prosecution, and the principles and practices applicable to a criminal prosecution.
33. Responses to breaches of the Fair Trading Act for misleading or deceptive conduct (for example
misleading health claims of food products or misleading food packaging) will be conducted in accordance with the ERG.
October 1: Food Standards Australia New Zealand (FSANZ) have proposed amendments of minimum age labelling on infant foods
34. FSANZ has called for submissions on a proposal to amend minimum age labelling requirements for infant foods from “four months” to “around six months”.
35. FSANZ said the proposed change would align the Food Standards Code with National Health and Medical Research Council (NHMRC) and New Zealand infant feeding guidelines.
36. Additionally, FSANZ is proposing to provide a definition of a ‘first food’, as well as require the minimum age to be placed on the front of an infant food.
37. Food manufacturers would have a three-year transition period to introduce the labelling changes.
38. The period for comment on the proposed changes closed on 12 November 2013. The proposal can be found here.
October 5: Food Standards Australia New Zealand (FSANZ) have abandoned the proposal to amend the Australia
New Zealand Food Standards Code ( Joint Code) to further regulate sports foods.
39. FSANZ’s decision to abandon this Proposal was taken in order to prepare a new proposal to enable full consideration of all the issues, including those raised at Initial Assessment, under FSANZ’s current legislative framework and regulatory process. The new proposal
will be scoped to address the issues associated with the broadening market and product range. Previous work will be carried over to the new proposal.
40. The Proposal was abandoned because the market, product range and composition of Formulated Supplementary Sports Foods (FSSF) have changed significantly since this Proposal was last considered. Today, many products used for sport are not regulated under Standard 2.9.4 of the Joint Code which regulates FSSF. Electrolyte drinks are regulated under Standard
2.6.2 which regulates non-alcoholic beverages and soft drinks while some products used for sport are
deemed formulated meal replacements and formulated supplementary foods and are regulated by Standard 2.9.3.
October 8: Food Standards Australia New Zealand (FSANZ) invites submissions on an application to change the Food Standards Code to allow food derived from genetically modified lucerne.
41. FSANZ Chief Executive Officer Steve McCutcheon has stated that FSANZ had assessed an application from Monsanto Australia to allow food derived from lucerne genetically modified to have reduced levels of lignin.
42. “Growers will be able to harvest this lucerne line later than conventional lucerne and thus benefit from improved yields of forage for their grazing animals,” Mr McCutcheon said.
43. FSANZ said it welcomes submissions on the application from government agencies, public health professionals, industry and the community.
44. Submissions closed on 19 November 2013. The proposal can be found here.
October 10: The Commerce Commission revisits Pak’nSave’s comparative advertising campaign
45. A September letter released to the National Business Review (NBR) under the Official Information Act revealed that the Foodstuffs brand has been told its comparative advertising campaign may be misleading or likely to mislead if the products compared are not truly comparable or if it is not generally more economical to shop at Pak’nSave.
46. The advertising includes all of Pak’nSave’s TV commercials, internet banners and in-store displays where it compared Pak’nSave’s prices with rival Countdown. In the TV advertising the “Stick Man” accompanies shoppers on their grocery shop at both Pak’nSave and Countdown and compares the dockets at the end.
47. The letter obtained by the NBR indicates that the Commerce Commission is going to continue to monitor Pak’nSave’s comparative advertising but will take no action at the moment. The letter also recommended that Foodstuffs seek legal advice on complying with the law and said it needs to regularly review its compliance procedures and policies.
November 6: Research commissioned in New Zealand to asses consumer understanding and the impact of nutrition labelling on food to determine whether nutritional front of pack labelling should be introduced in New Zealand
48. Food Safety Minister Nikki Kaye has announced that she has “asked the Ministry for Primary Industries to commission social research about how a Health Star Rating System might be perceived and understood in New Zealand”.
49. Over the past 18 months the New Zealand Front of Pack Labelling Advisory Group has been considering principles for voluntary front of pack nutrition labelling and reviewing proposals that are being developed
in Australia, specifically the proposal for a star rating system. The group is made up of food safety officials, public health and consumer groups, and the food industry.
50. The group indicated an interpretive system of marks such as ticks or stars that focuses on the nutritional value of the whole food, is preferable to alternative systems like traffic light labelling which focuses on individual nutrients. The research is aimed at getting a gauge on the impact of a voluntary star rating system in New Zealand.
51. The star system is intended to give consumers at-a- glance nutrition information about the food they are buying using a five-star rating scale. A higher star rating means better nutritional value.
52. The system also includes nutritional information icons for energy, saturated fat, sodium, and sugars. It can include one positive nutrient such as calcium or fibre.
53. Ms Kaye stated that, “a potential benefit of the simpler front of pack nutrition labelling could be the changes that food companies decide to make to their products to make them healthier and get higher star rating.”
54. The proposed Australian system was presented to the Australia-New Zealand Forum on Food Regulation (FoFR) in June this year. Since then more technical work has been done and the final system will be presented at the next FoFR meeting in December.
55. It is anticipated that the research will be completed within the next month.
56. A media release on the commissioned research can be found here.
AUSTRALIA
June: New “health star rating” front-of-pack labelling system adopted in Australia
57. In June of this year the Australian Government announced that they would adopt a new Front-of-Pack Labelling “health star rating” system designed to give consumers at-a-glance information about the food they are buying. The health star rating system employs labels that show salt, fat, sugar and energy content. The more stars the product has, the more “healthy” the product is meant to be.
58. The system in Australia will initially be voluntary but may become mandatory.
59. The New Zealand Food and Grocery Council (NZFGC) has identified certain technical flaws with the proposed health star rating system and they have pointed out that the huge cost of repackaging would likely filter down to consumers in the form of higher prices.
60. An article by the NZFGC on the health star rating system can be found here.
June 10: Gluten-Free Debate as AFGC pushes for Change
61. The Australian Food and Grocery Council is proposing that Food Standards Australia New Zealand alter the definition of ‘gluten free’ in Australia to allow food to contain up to 20 milligrams of gluten per kilogram to still be called ‘gluten free’. This would bring Australian standards in line with the British and European standards. Some argue that 10 milligrams per kilogram would be safer for coeliacs.
62. In Australia, under Standard 1.2.3 of the Australia New Zealand Food Standards Code, a food business must declare the presence of gluten in its foods. Currently, for a food to be gluten-free it must not contain detectable gluten (Standard 1.2.7).
July 11: Kelloggs – becoming a “cereal” offender
63. Two times in two weeks two variants of Kelloggs LCM bars “fun facts” advertisements, featuring animated dinosaurs, snails, children’s voices and fantasy themes – were directed primarily to children and were therefore a breach of the Responsible Children’s Marketing Initiative (RCMI).
64. As a signatory to the RCMI code, Kelloggs undertakes not to advertise products to children under 12 years unless they represent a healthy choice.
65. A Coco-pops TV advertisement was pulled the week before for the same reasons.
July 16: ‘Organic’ Water Claims
66. The Australian Competition and Consumer Commission (ACCC) has directed seven suppliers of bottled water to remove ‘organic’ claims from labelling and marketing material. An eighth supplier has withdrawn its product from sale. The following bottled waters have been renamed and new bottles are making their way on to the market:
(a) Active Organic;
(b) Lithgow Valley Springs Organic;
(c) Nature’s Best Organic;
(d) Organic Australia;
(e) Organic Falls;
(f) Organic Nature’s Best; and
(g) Organic Springs.
67. The ACCC has rejected claims from a number of manufacturers that the word ‘organic’ was not a representation but part of the brand name.
68. The word ‘organic’ in the context of food and drink refers to agricultural products which have been farmed according to certain practices. The ACCC said water is not an agricultural product, and cannot benefit from such practices so it is “not appropriate to use ‘organic’ to describe it”.
69. Delia Rickard, ACCC Deputy Chair stated that, “organic standards acknowledge that water cannot be organic. Any claim that particular water is organic would therefore be misleading or deceptive.”
September 4: Government seeks submissions on possible changes to Australia’s caffeine policy guidelines
70. Australia’s Food Regulation Standing Committee (FRSC) has invited public submissions on a Food Regulation Policy Options Paper for formulating policy guidelines on the regulation of caffeine in food in Australia and New Zealand.
71. The purpose of the Food Regulation Policy Options Paper is to establish if the earlier 2003 “Ministerial Council Policy Guideline on the Addition of Caffeine to Foods” needs to be updated, maintained or rescinded.
72. While the Options Paper does not specifically propose possible changes to the regulation of caffeine (any regulatory changes would need to proceed through the food standards development process set out in the Food Standards Australia New Zealand Act 1991), a revision
to the Policy Guideline may lead to a review of existing regulatory standards applying to caffeine.
73. FRSC consultation ended on 18 October 2013.
74. The consultation document can be found here.
September 5: Maximum permissible residue limits for certain chemicals in blueberries and raspberries is added to Standard 1.4.2 of the Australia New Zealand Food Standards Code ( Joint Code)
75. Note that Standard 1.4.2 only applies to Australia, not New Zealand.
76. Standard 1.4.2 deals with maximum permissible limits for agricultural and veterinary chemical residues present in food.
77. Standard 1.4.2 has been varied by inserting in Schedule 1 for each of the following chemicals, the foods and
associated maximum residue limits in alphabetical order: Azoxystrobin
Blueberries 5
Bifenthrin
Raspberries, red, black 1 Fenhexamid Blueberries 5 Fludioxonil
Commodities of animal origin: Sum of fludioxonil and oxidisable metabolites, expressed as fludioxonil
Commodities of plant origin: Fludioxonil Blueberries 2
78. A copy of the New Zealand Gazette notice can be found
here.
79. Standard 1.4.2 of the Joint Code can be found here.
September 13: Reform around the meaning of “free” in the chicken and egg sales industry imminent
80. In the past few years the ACCC has taken action against chicken and egg producers focussing on what consumers understand by the terms “free range” and “free to roam”.
81. There is currently no single national accepted definition of the space requirements for “free range” chickens whether they are bred for laying eggs or for meat.
82. New Poultry Animal Welfare Standards and Guidelines are scheduled to be developed to replace the existing Model Code of Practice for the Welfare of Animals: Domestic Poultry (version 4). These Guidelines are likely to clarify the definition of “free”.
83. Also New South Wales, Western Australia and South Australia currently have Bills before their parliaments in relation to “free range” densities and labelling of free range products.
84. The ACCC has not said publicly that it is focussing on the chicken and egg industries. However, the ACCC has commented that it “recognises that consumers are increasingly making food purchasing decisions based on production methods and processes (value based
decisions).” Thus the ACCC is likely to remain vigilant in its focus on misleading and deceptive “free range” or “free to roam” claims.
October 2: CHOICE makes ‘super-complaint’ about free- range egg market
85. Australian consumer group CHOICE has asked New South Wales Fair Trading to investigate potentially misleading “free-range” egg claims after finding that consumers in NSW are paying double the price of cage eggs for products that are “unlikely to meet their expectations”.
86. The super-complaint process allows CHOICE to bring forward evidence of issues harming NSW consumers, and requires the regulator to publicly respond within 90 days, which CHOICE said provides a “powerful avenue for consumer groups to focus attention on systemic problems in markets”. This is the second super-complaint CHOICE has submitted under its trial with NSW Fair Trading.
87. The Australian Egg Corporation itself has admitted there is huge variation in the conditions in supposedly free- range operations,” said Angela McDougall, CHOICE Lead Campaigner.
88. CHOICE has recommended that NSW Fair Trading further investigate free-range egg claims and take action where it finds evidence these claims are likely to mislead
NSW consumers. A response from NSW Fair Trading is expected before the end of the year, in accordance with the super-complaint trial agreement.
89. An article on the complaint can be found here.
October 9: Food Standards Australia New Zealand (FSANZ) has called for submissions on a proposed primary production and processing standard for meat in Australia
90. FSANZ is examining food safety management in the primary production and processing stages of the meat supply chain, addressing meat and meat products from major and minor meat species (for example, cattle, sheep, goats, pigs, buffalo, camels, alpacas, llamas, deer, horses, donkeys, rabbits, crocodiles, ostrich and emu) and wild game. The proposal also considers rendered products for human consumption and natural casings.
91. FSANZ said the draft variation:
(a) enables management of hazards through the entire meat supply chain by establishing a set of food safety requirements that all businesses must meet
i.e. integrates the producer and processor providing a national “whole of chain” approach to food safety regulation;
(b) is a low cost refinement in terms of a regulatory option which will make the regulation of meat more robust. More stringent regulatory options have not been considered because risks are well managed;
(c) will provide the public and industry with assurance that the regulator can investigate, where appropriate, food safety matters at any point in the meat supply chain; and
(d) is consistent with the principles of meat hygiene applying to primary production articulated in the Codex Code of Hygienic Practice for Meat.
92. The meat industries across Australia are currently regulated on a State-by-State basis. Because the meat industry needs to be regulated as a primary industry, the regulators and laws enforced by these agencies are completely independent of the Australian New Zealand
Food Standards Code. Once the products make it to retail shelves, they become regulated as food products.
93. Given this framework, each State currently has its own set of regulations that go far beyond anything currently in the Food Standards Code. The meat industry and its regulators rely on far more detailed Australian Standards. Industry commentators have suggested this begs the question of whether the new Meat Processing Standard will actually make a difference to the regulation of meat production and whether it is a valuable use of time and resources.
94. The closing date for submissions is 3 December 2013.
The proposal and information on how to make a submission can be found here.
31 October: The Federal Court has ordered Baiada Poultry Pty Ltd and Bartter Enterprises Pty Ltd, the processers and suppliers of Steggles branded chicken products to pay a total of $400,000 in civil pecuniary penalties.
95. The Federal Court has declared that Baiada and Bartter engaged in false, misleading and deceptive conduct (or conduct liable to mislead and deceive) when it described on product packaging and in advertising that its meat chickens were ‘free to roam in large barns’.
96. The Australian Chicken Meat Federation Inc (ACMF), the peak industry body for Australia’s chicken meat industry, was also ordered to pay $20,000 in penalties.
97. The Court declared ACMF engaged in false, misleading and deceptive conduct (or conduct liable to mislead or deceive), when it claimed in publications on its website that meat chickens produced in Australia were ‘free to roam’ or able to ‘roam freely’ in large barns. The Court made its declaration against ACMF confined to the
extent that they relate to the stocking densities of Baiada and Bartter’s meat chickens and that of Turi Foods Pty Ltd.
98. In making its orders, the Court also ordered ACMF to send a prescribed letter to its members advising of the Court outcome, with a copy of the Court’s judgment enclosed, and ordered ACMF’s staff to attend trade practices compliance training.
99. An article on the outcome of the case can be found
here.
1 November: Court orders Luv-a-Duck to pay $360,000 for misleading claims
100. The Federal Court has ordered by consent that Luv- a-Duck Pty Ltd (Luv-a-Duck) pay $360,000 in civil
pecuniary penalties following action by the Australian Competition and Consumer Commission (ACCC). The Court also ordered Luv-a-Duck to pay $15,000 towards the ACCC’s costs.
101. The Court declared by consent that Luv-a-Duck engaged in misleading or deceptive conduct (or conduct likely to mislead or deceive) and made false representations by using words on its packaging, website, brochures and in a promotion for the Good Food & Wine Show in Adelaide in 2012, that its ducks were:
(a) ‘grown and grain fed in the spacious Victorian Wimmera Wheatlands’; and/or
(b) ‘range reared and grain fed’ (which mainly appeared as a logo).
102. The ACCC argued that these descriptions represented Luv-a-Duck’s duck meat products were or will be processed from ducks that:
(a) spent at least a substantial amount of their time outdoors;
(b) were raised in a spacious outdoor environment; and
(c) were of a different quality than duck meat products processed from barn-raised ducks,
when this was not the case.
103. In fact, the duck meat products that Luv-a-Duck sold or offered for sale were processed from ducks that did not spend any of their time outside of their barn.
104.“This penalty is a further warning to the poultry industry and businesses generally that consumers are entitled to trust that what is said on product packaging and other promotional product material is true and accurate,” ACCC Commissioner Sarah Court said.
105. In addition to the penalties and costs, the Court also made consent orders:
(a) restraining Luv-a-Duck for a period of three years from using the phrases ‘grown and grain fed in the spacious Victorian Wimmera Wheatlands’ and ‘ranged reared and grain fed’ or modifications of those words when its ducks are not raised in such conditions;
(b) requiring Luv-a-Duck to publish corrective notices on its website and business premises and send a corrective notice to its customers; and
(c) requiring Luv-a-Duck to implement and maintain a trade practices compliance program for three years.
106. A media release on the outcome of the case can be found here.
4 November: Australian Government to review Competition Laws for Food and Retail sectors
107. The Australian Government has announced it will undertake a ‘root and branch’ review of competition laws and how these relate to the food and beverage manufacturing and retail sectors, according to Bruce Billson, Federal Minister for Small Business.
108. Speaking at the Australian Food and Grocery Council’s (AFGC) Leadership Forum in Canberra last week, Mr Billson said that many of the current issues relating to competition policy in the food industry involved the market position of “major players in the market”.
109. The review has come from grocery processors, food manufacturers and primary producers expressing
concerns about an imbalance of bargaining power between the major supermarkets (predominantly Coles and Woolworths) and themselves.
110. Mr Billson said that while intensified competition between the two major supermarket chains had reduced grocery retail prices, there were concerns that those reductions “come at the expense of suppliers and impact on the longer-term durable benefit to consumers”.
111. Mr Billson said these issues had been discussed in a number of spheres, including Parliamentary committees and industry reports. He also highlighted the current investigation by the Australian Competition and Consumer Commission (ACCC) into complaints about “anti-competitive and unconscionable conduct” by the supermarkets towards their suppliers.
112. “The review will be an independent examination of how the competition framework is working, whether it is keeping up with emerging trends, and looking beyond the competition framework to identify impediments
to competition with the goal of improving the living
standards of all Australians,” Mr Billson said.
113. An article on the review can be found here.
November 12: Major Australian food companies sign up to voluntary wholegrain claims code
114. Three of Australia’s largest core grain food manufacturers
– Goodman Fielder, Sanitarium and Bakers Delight – are among the first registered users of a voluntary industry Code of Practice for Whole Grain Ingredient Content Claims.
115. The Grains and Legumes Nutrition Council (GLNC) developed the Code in June 2013 to “bring greater clarity for consumers about the content of foods labelled as whole grain”.
116. For the first time, the Code sets a standard for labelling of whole grain foods, which can vary widely in whole grain content. Content claim levels for the Code are based on a contribution to 48 gram whole grain Daily Target Intake (DTI) and fit with the Australian Dietary Guidelines.
117. All three manufacturers – Goodman Fielder, Sanitarium and Bakers Delight – have chosen to use the DTI statement.
118. An article on the Voluntary Code and the parties who have signed up can be found here.
UNITED KINGDOM
June 18: UK Front-of-pack traffic-light labeling system roll
out
119. The Government has approved a new labeling system using traffic-light-coded food labels indicating how much fat, salt and sugar an item contains to be rolled out over the next 18 months.
120. The scheme is currently voluntary.
121. However, all the main supermarket chains and some of the biggest producers of snack foods, such as PepsiCo and Nestlé, have agreed with ministers to use front-of- pack nutritional labels coloured red, amber or green (with red indicating high levels) on some or all of their products in an effort to make it easier for consumers to choose healthier options.
122. The new labels are intended to help shoppers know at a glance whether a product contains a low, medium or
high amount of fat, saturated fat, salt, sugar and calories.
123. The traffic-light labels, which many food campaigners and medical organisations have long called for, will be part of a new hybrid nutritional labelling scheme that combines them with guideline daily amounts (GDAs), which senior doctors have criticised as deceptive and utterly baffling to most consumers.
124.Big supermarkets, including Tesco, Sainsbury’s, Marks & Spencer, Waitrose and the Co-op, will start using them “imminently”, though some may take “a few months to rebrand their packaging”, the Department of Health said.
125. An article on the traffic-light system can be found here.
July 17: The United Kingdom Advertising Standards Authority (ASA) labels Coke ad as misleading customers about how the calories in one can of Coke can be worked off
126. Coca-Cola Great Britain produced a 30 second advertisement that showed a variety of activities like dog walking, dancing and laughing that it says would burn off the 139 calories in a single serving of Coke. The ASA examined complaints from some viewers who said it was not clear that all the activities depicted were required to use up the energy from the beverage.
127. The ASA said that even though it understood that the advertiser’s intention was to convey that the combined activities would burn 139 calories, because they did not consider that that was sufficiently clear to some viewers,
they concluded the ad was likely to mislead. So even though Coke could substantiate that the combined activities would burn that many calories, where they fell down was in portraying this to the consumer.
128. Key take out: It is critical to ensure that your advertisements accurately reflect any research you undertake. If you’ve done the testing which supports your product claim, don’t trip at the last hurdle by presenting the research in a way that misleads.
129. A copy of the UK ASA decision can be found here.
August 19: Tesco strawberry blunder
130. Tesco has been fined £300,000 for misleading customers after a single shopper complained about a national strawberry price promotion which allegedly netted the chain £2.3m in profits
131. The case - brought by Birmingham City Council - related to the cost of 400g punnets of British strawberries sold at a store in the city.
132. A consumer complained the punnets were marked up as
“half price” at £1.99 - with an apparent original cost of
£3.99 crossed out.
133. The consumer asked the United Kingdom Trading Standards Institute to investigate because she had never seen the original price and wondered if it was excessive and misleading.
134. Trading Standards told the court that Tesco’s offer (at
£1.99) fell foul of rules as it ran for 14 weeks, but the strawberries were sold at the higher price of £3.99 for a much shorter length of time.
135. The judge described Tesco’s turnover as a result of the promotions as “excessive” but agreed that while the supermarket chain had breached customers’ trust, it was not the retailer’s intention to deliberately mislead them.
136. Key take out: Make sure that the sale period for a product is not substantially disproportionate to the period during which the recommended retail price is run.
137. We are still trying to get hold of the Court’s decision.
We are happy to update you on any relevant aspects of the judgment once we receive it. A news article on the decision can be found here.
