Snack Makers fined By ACCC for Misleading Health Claims

Tuesday 12 July 2016 @ 10.11 a.m. | Legal Research | Trade & Commerce

The makers of Streets Paddle Pop ice-creams and Sakata rice snacks have each paid a penalty of $10,800 after exploiting school canteen guidelines to create an alleged "health halo" around their processed products.

Background to the Case

The Australian Competition and Consumer Commission (ACCC) has issued an infringement notice to Unilever (owner of Streets Paddle Pop), and Smith's (maker of Sakata snacks), after it found their "school canteen approved" logos were making shoppers assume the products had been approved or were suitable as healthy options for school canteens.

Unilever had slapped a "School canteen approved" logo with a tick on the front, back and one side of its 10-pack box of "rainbow" Paddle Pop, despite the product being 20% sugar. Smith's had stamped a "Meets school canteen guidelines" logo featuring a lunchbox with a sandwich and fruit on its highly-processed Sakata "paws pizza supreme" rice snacks.

This matter was first brought to the ACCC’s attention through a complaint made by consumer advocacy group CHOICE.

Alleged Contravention of the NHSC Guidelines

The Department of Health established the National Healthy School Canteens Guidelines (NHSC Guidelines) in 2010 to provide training and guidance to school canteen managers so they can make informed assessments of the nutritional value of food and drink that may be supplied in school canteens.

Both of the products in question fell within the “amber” category of the NHSC Guidelines which means it should be “selected carefully” rather than eaten regularly or in large amounts.

It has been alleged that both products featured a disclaimer that it met the "amber" criteria of the NHSC Guidelines, but the ACCC dismissed these because they were written in a small font and placed on a different side of the packaging.

During October 2015, Fairfax Media reported an investigation by consumer group Choice found companies were increasingly exploiting the Federal and State governments' school canteen guidelines. It identified 17 company-made logos on unhealthy foods and tts survey of more than 1,000 parents also found 43% wrongly believed the logos were approved by an independent authority or government body.

Comment from the Consumer Watchdog

The ACCC Commissioner Sarah Court said:

"The ACCC believes both companies were using logos to claim that these products were a healthy option for school canteens to supply to children, when they were not. School canteen managers, parents and caregivers rely upon product packaging and labelling when choosing healthy snacks for children. The ACCC did not consider these disclaimers were sufficiently prominent to correct the misleading representations created by the logos."

Reaction from Unilever and Smiths

A Unilever spokeswoman said the company had co-operated with the ACCC and will be removing the logos from its "core" Paddle Pop range.

A Smith's spokeswoman said while the company stood by the "integrity" of its labelling and marketing of the Sakata product, it had already begun removing the logo before receiving the infringement notice.

The Smith’s spokeswoman said "… We anticipate new packaging to arrive on store shelves later this year [2016]."

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Sources:

Paddle Pop and Sakata snack makers fined by ACCC for misleading health claims – smh.com.au

Unilever and Smith's pay penalties for misleading healthy food representations – ACCC Release 122/16 

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