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ACCC announces 2017 enforcement priorities

Published: 7 Mar 2017

By Joe Lederman (Managing Principal, FoodLegal) and John Thisgaard (FoodLegal Consultant)

© Lawmedia Pty Ltd, March 2017

On 24 February 2017 the Australian Competition and Consumer Competition gave an overview of the types of practices it will be targeting throughout 2017.  This article summarises the points of focus and some of their implications.

1.    Misleading and deceptive conduct

Misleading and deceptive claims will continue to be a major enforcement objective by the Australian Competition and Consumer Commission (ACCC).  In relation to claims made by food products, the ACCC indicated that particular attention will be paid to health claims and claims which misrepresent the nutritional value of a product.

The ACCC used its action against Heinz as an example.  The ACCC initiated action against Heinz in June 2016 in relation to its “Little Kids Shredz” products.  It was claimed by the ACCC that the products consisted of approximately 70% sugar, and that prominent images of fresh fruit and vegetables as well as the statement “99% fresh fruit and veg” on the packaging amounted to a misleading claim.  It was further alleged that an associated claim that the products will encourage toddlers to discover nutritious food is misleading - because of the high sugar content in the product.

By using this example, the ACCC highlighted that it will be monitoring claims about the healthiness of the product, and may take action even when there may not be any apparent breach of the Australia New Zealand Food Standards Code (Food Standards Code).  Particular attention will be paid to products that are marketed to children.

2.    Competition and consumer issues in the agriculture sector

The ACCC announced that it will be continuing the work it commenced in 2016 with the establishment of an Agriculture Unit.  A series of workshops and inquiries around rural Australia has identified a number of issues facing the agriculture sector, for instance imbalances in bargaining power between growers and wholesalers, and unfair and uncertain contract practices.

It was flagged that actions will be commenced for alleged breaches of the Competition and Consumer Act.  Cartel conduct is currently a significant area of focus for the ACCC and so it would not be surprising to see an action against such conduct if it were detected in the agriculture industry.

The ACCC will continue this approach by looking into price competitiveness, trading practices and the supply chain of the dairy industry.  The ACCC expects to deliver a report on this by 1 November 2017.

3.    Country of Origin Labelling Laws

As many readers of FoodLegal Bulletin are aware, new Country of Origin Labelling laws were introduced on 1 July 2016.  The new laws are regulated by the ACCC, which has announced that it will undertake education activities for food businesses before the laws become compulsory for all food businesses on 1 July 2018.

Ideally, this would involve the provision of additional guidance for industry that would ultimately make firms better able to comply and reduce the need for ACCC intervention.

FoodLegal has prepared a series of videos for online self-training.  These are obtainable online at https://www.foodlegal.com.au/foodlegal-online.html 

4.    Unfair contract terms

In November 2016, the prohibition on unfair contract terms was extended to provide protection to small businesses who enter into standard form contracts.  A detailed explanation of the laws and how they work can be found in a previous FoodLegal Bulletin article (October 2016).

The ACCC has indicated that it will actively seek to enforce the new law.  This is of particular importance to franchisees, who may be small businesses that are now protected.  It is also relevant to large food companies who regularly contract with small suppliers, growers, or franchisees.  These companies should review the terms with which they engage smaller businesses.