27 November 2006
Do your food products claim to be "fresh", "pure", or natural? These sorts of descriptions are frequently used but if you use them carelessly, you might fall foul of the Trade Practices Act and face enforcement action from the ACCC, which has signalled it will be taking particular interest in food descriptions.
The ACCC's new "Food descriptors guideline to the Trade Practices Act" sets out some specific food descriptors which might lead to breaches of provisions of the Trade Practices Act, which prohibit misleading and deceptive conduct and false representations in trade or commerce. The ACCC is keen to emphasise that whether a product complies with voluntary or mandatory codes, the key issue is that consumers would expect from the claims made on the product.
"Claims" don't just include the advertising material or blurb on the product - your brand name might be making claims too. In recent times, the ACCC has also been showing a particular interest in internet advertising as well.
In this Alert we'll look at the main food descriptors in the Guidelines and the ACCC's views on them.
Assurance claims - quality and characteristics of the food
For some groups, such as vegans and particular religious communities, it's important to know that their food has a certain quality or has particular characteristics. If food is described as halal or kosher, there should be a factual basis for that claim or, where necessary, certification.
Pulped, reconstituted, strained and then frozen
Process claims are similar to assurance claims in that these claims describe the process or production methods used for the food product. Into this category come claims about how the food was produced (eg. organic, free range), processed (eg. frozen, unsweetened) or prepared (eg. flame-grilled).
Organic foods are a fast-growing sector of the food industry. Consumers would generally expect foods described as organic not to have been cultivated with synthetic fertilisers or herbicides. The ACCC points out that this extends to the whole process, so imported food cultivated organically but chemically treated upon entry to Australia no longer could be described as organic.
Fresh from the backyard
Origin claims don't only cover the familiar "Made in / Product of ..." labels, but also the claims that something might be "locally grown". That sort of claim can be a difficult one to justify - how local is local?
Pure, fresh, natural
These claims are described as standard/style/select claims implying a relationship with a particular standard, style or product selection. For example, "pure" or ‘"100%" juice implies that the product is entirely juice with no extra additives or other contents.
"Fresh" is a slightly trickier term. Generally, says the ACCC, this "refers to food that is put on sale at the earliest possible time and close to the state it would be in at the time of ‘picking', ‘catching', producing etc. The term fresh generally implies that food has not been frozen or preserved." Having said that, the ACCC acknowledges that consumers would think milk is "fresh" even when it's been pasteurised, or that meat is "fresh" even though it has been stored for a short term.
"Natural" is another term which causes confusion. For many consumers, this would mean the food product is "made up of natural ingredients, ie. ingredients nature has produced, not man-made or interfered with by man."
No-one takes this stuff seriously!
Some terms are not really descriptive but certainly sound good on a packet, such as "Country Style" or "World's Best". These claims, says the ACCC, are "simply exaggerated, fanciful or vague claims for a product and are not likely to be meaningful to consumers, or to reasonably influence their choice of product." It is good to know that the concept of puffery lives on even though its scope is narrow.
So what should you do?
Misleading and deceptive conduct and false representations can have expensive consequences with possible fines of up to $1.1 million available under the Act. Other remedies which can be ordered are court-ordered compliance programs and corrective advertising so it's important to avoid breaching it. Competitors can also bring proceedings seeking injunctions and damages.The first thing to remember is that complying with FSANZ labelling will not stop you from breaching the Act. Labelling and advertising should be reviewed to ensure you comply with all relevant laws. Secondly, the Guidelines are only guidelines reflecting the ACCC's view of the law and are quite general. Each label or advertisement needs to be considered on a case-by-case basis.
Thirdly, it is important to remember the widespread powers and remedies that the ACCC has - indeed, the better question might be what power does the ACCC not have. Under Part VI of the TPA, the ACCC, with leave of the court, can even intervene in private proceedings instituted under the TPA - for example between competitors where an issue of public importance is at stake. It can also ask the court to make a community service order (eg. the distribution of educational materials explaining obligations under the TPA), a probation order (including establishing a compliance programme and educating employees) or punitive orders, including an adverse publicity order.
