ACCC v H.J. Heinz Company Australia Limited [2018] FCA 360: Heinz's Packaging Misleading

Thursday 22 March 2018 @ 12.15 p.m. | Legal Research | Trade & Commerce

In the recent judgment of ACCC  v H.J. Heinz Company Australia Limited [2018] FCA 360 (19 March 2018), Justice White found that the packaging of Heinz Little Kids Shredz food misleadingly claims that the snack product is beneficial to the health of young children.  

  According to an ACCC Media Release of 19 March 2018:

“… The Court found that Heinz had represented that its Shredz products were beneficial to the health of children aged 1-3 years, when this was not the case. Further, the Court found that Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to health of children was misleading.”

The Australian Competition and Consumer Commission (the ACCC) also alleged that Heinz contravened sections 29(1)(a), 29(1)(g) and 33 of the Australian Consumer Law (the ACL) - which is contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Act).

Background

During 2017 the ACCC launched legal action against H.J. Heinz Company Australia Limited (Heinz), with the ACCC alleging Heinz were deliberately misleading the public about the nutritional content of the Shredz range, which comprises products containing fruit pastes, purees and concentrate.The ACCC's initial complaint referred to three items in the Shredz range — an apple product, a peach product, and a fruit and chia product.

The Judgment

During the court proceedings, counsel for the ACCC said the boxes feature images of fruit and vegetables and state "99 per cent fruit and veg" when the products contain around 60 per cent sugar.

In handing down his judgment, His Honour upheld part of the ACCC's claim that the representations on the boxes falsely imply that the products were beneficial to toddlers.

His Honour said at [para 314]:

"… Heinz ought to have known that it was making the healthy food representation in relation to each product and that that representation was false or misleading."

and at [para 312] of the judgment:

"… Each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two thirds sugar was beneficial to the health of children aged one to three years was misleading … Each ought to have known that consumption of a product with that level of sugar may have the effects which underpin the [World Health Organisation] guidelines."

However, His Honour dismissed claims by the ACCC that the packaging implied the products had the same nutritional value as the natural fruit and vegetables pictured on the box. He said at [para 65]:

“… The consumers would, in my opinion, have readily understood that the Berries Product was a processed product and would have understood that a representation was being made that it was derived, at least principally, from the depicted ingredients. They would not have understood the Product to be in the form of fresh fruit and vegetables. The pictures of the sticks of the Berries Product would have confirmed that impression.”

His Honour also dismissed accusations that Heinz suggested "… it would encourage the development of healthy eating habits …" for young children and that the products were not nutritious.

His Honour commented further at [para 146]:

"… I am not satisfied that the ACCC has established that the berries product was not nutritious… on the contrary, it did have some of the nutrients necessary to sustain human life …"

Comment from the ACCC

In a Statement from the ACCC, Acting Chair Delia Rickard commented:

"… We welcome the Court’s decision today which shows that businesses that make false or misleading claims about the health benefits of products face serious consequences  … We were particularly concerned by Heinz's conduct because the Shredz products were marketed as being beneficial for young children …  Heinz's Shredz products consisted of over 60 per cent sugar, significantly higher than that of natural fruit and vegetables. An apple in comparison contains around 10 per cent sugar."

Comment from Heinz

Managing Director of Heinz, Bruno Lino said the company was disappointed with the decision, but respected it. He said in a statement:

"There was never any intention to mislead consumers … The Shredz products have not been sold here since May 2016. We are looking at the matter carefully to see if there is anything further we can learn."

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Sources:

Court finds Heinz made a misleading health claim – ACCC Media Release 41/18 (19 March 2018)

Heinz packaging of Little Kids Shredz food product deemed misleading by Federal Court – (Rebecca Opie, ABC News, 19 March 2018)

ACCC v H.J. Heinz Company Australia Limited [2018] FCA 360 (19 March 2018)

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