Competition and consumer law update for the food and beverage sector

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Heinz faces proceedings over nutritional claims

The Australian Competition and Consumer Commission (ACCC) has commenced proceedings against Heinz in relation to nutritional claims it made about certain products for children. The ACCC alleges that Heinz made false and misleading representations and engaged in conduct that may mislead the public, in relation to the nature, characteristics and suitability of the products. The allegations are that the Heinz products, which contain over 60% sugar: 

  • Contained images and statements that represented they are of equivalent nutritional value to fruit and vegetables and are a healthy and nutritious food for young children, when they are not, and 
  • Are likely to inhibit the development of a child's taste for natural fruit and vegetables and encourage children to become accustomed to and develop a preference for sweet tastes. 
The ACCC is seeking a number of remedies including pecuniary penalties. (Read more
 

Snowdale made false or misleading 'free range' egg representations 

One of Western Australia's largest egg producers, has joined the increasing list of egg businesses found to have made false or misleading 'free range' egg claims. The Court found that Snowdale represented that its eggs were laid by hens that went outdoors and roamed freely on most days, when in fact most of the hens did not move around on an open range. 

On 31 March 2016, Consumer Affairs Ministers agreed to the introduction of a new information standard, made under the Australian Consumer Law, for free range eggs. The standard is not yet in place but will create an enforceable, national requirement that producers must meet to label their eggs 'free range' (Read more). Egg producers should refer to the ACCC's enforcement guide in relation to free range hen egg claims for further guidance on their rights and obligations in relation to such claims (Read more). 

Country of Origin Food Labelling Information Standard commenced on 1 July 

Producers of food products and certain beverage products should familiarise themselves with the Country of Origin Food Labelling Information Standard 2016 which commenced on 1 July 2016. The standard will apply to food that is sold (or offered or displayed for sale) in Australia and will impose different mandatory standards depending on whether the product is grown, produced, made or packaged in Australia or another country. 

The standard imposes country of origin labelling requirements, legibility requirements and restrictions on particular uses of logos and bar charts. Most food that is grown, produced or packaged in Australia will need to carry a standard mark and an indication of the proportion of Australian ingredients by weight. For most imported food, the country of origin statement will need to be in a clear box. 

Other foods that are specified by the standard to be 'Non-priority foods' will be subject to voluntary, not mandatory, labelling requirements. These are generally foods for which Australian consumers are least concerned about origin information, such as confectionary and seasonings. 

Businesses should be aware that supplying food products that fail to comply with mandatory information standards is prohibited and may result in pecuniary penalties or fines. (Read more

Woolworths to pay $9 million in cartel proceedings 

The Court has ordered Woolworths pay $9m in penalties for being knowingly concerned in the making of, and giving effect to, an understanding between a number of producers that they would cease supply of certain laundry detergents to Woolworths in early 2009. The outcome follows the ACCC's continued focus on cartels and supermarkets' dealings with their suppliers in relation to consumer goods. (Read more

Collective bargaining by Victorian and Western Australian chicken growers  

Chicken meat grower members of the Victorian Farmers Federation and the WA Broiler Growers Association have been granted authorisation for ten years to collectively bargain with chicken processors they supply. The ACCC said the arrangements are likely to give chicken growers greater input in their contracts with chicken meat processors and lead to costs savings for both the famers and the processors.
The authorisations mean that proceedings cannot be brought against the members for making a cartel provision or an agreement with a provision that has the purpose or likely effect of substantially lessening competition. (Read more: Victoria and Western Australia

Further information

Read our previous updates about developments in the F&B sector in 2016 and insights into ACCC investigations: