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More News of Trade Practices Compliance Requirements: FoodLegal holding Trade Practices seminar for food industry participants

Published: 7 Oct 2008

By Joe Lederman
FoodLegal Lawyers and Consultants
© Lawmedia Pty Ltd, October 2008

FREE ARTICLE

The Australian Competition and Consumer Commission (‘the ACCC’) has continued to pursue companies, both across the food industry and other industries, for marketing products in a way which the ACCC believes may mislead consumers. Two recent examples highlight the need for the food industry to be on alert and to take pro-active measures to be protected from potentially costly litigation under the Trade Practices Act.

1. Austrimi Seafoods Pty Ltd undertakings (16 September 2008)

Austrimi Seafoods had marketed a seafood product under the brand name of ‘Kalamari’. This product was in the shape of rings and had been coated in bread crumbs. However, the seafood filling of the product contained only 4% squid (another 30% was made up of white fish meat).

A complaint was made to the ACCC and the ACCC took the view that branding a product ‘Kalamari’ when squid was not the predominant ingredient of the product would mislead consumers. It did not matter that the correct spelling of real “calamari” would have been with the letter “C” rather than with a “K” as the test for misleading conduct is taken from the consumer’s perspective. The ACCC’s view was also not swayed either by an argument that the descriptor on the product stated that the product consisted of “seafood rings” or by the fact that the ingredients list clearly stated the proportions of the fish ingredients in the product.

The ACCC considered this form of marketing to be a breach of Sections 52 and 53(a) of the Trade Practices Act. On 16 September 2008, the ACCC confirmed that it had used its power under Section 87B of the Trade Practices Act to negotiate court-enforceable undertakings with Austrimi Seafoods Pty Ltd.

Austrimi Seafoods was required to publish corrective advertising, amend their product packaging and have agreed to run a Trade Practices Compliance Program which will include a mandatory review of the company’s trade practices in one year’s time that will be delivered to the ACCC.

2. V8 Supercars Australia Pty Ltd undertakings (16 September 2008)

The ACCC has also been pursuing and prosecuting companies for making inaccurate environmental claims (“eco-labelling claims” or “green claims”) in relation to their products. On 16 September 2008, it was announced that court-enforceable undertakings were provided to the ACCC by V8 Supercars Australia Pty Ltd (“V8 Supercars”), as explained below.

In 2007, V8 Supercars had attempted to market a new environmentally sustainable racing program. V8 Supercars claimed that their entire 2007 Championship Series, including the actual racing, transport for the racing teams, air travel and other carbon-emitting activities, had been completely offset by the planting of 10,000 native trees.

The ACCC said that the planting of 10,000 trees would take several decades to entirely offset the carbon emissions of one year of racing. Furthermore, the ACCC was concerned that the calculation of the total carbon emissions of the Championship Series had not taken into account all the possible emissions. The failure to disclose accurately to consumers how long it would actually take for the claim of ‘entirely carbon offset’ to be true would in fact mislead consumers and be a breach of Section 52 of the Trade Practices Act.

On 16 September 2008, V8 Supercars entered into court-enforceable undertakings with the ACCC declaring they would not make any further green marketing claims without first consulting a lawyer.

Green marketing has become more and more popular, affecting all industries, and the ACCC has published two guides on how to avoid misleading consumers:

§         Green marketing and the Trade Practices Act; and

§         Carbon claims and the Trade Practices Act.

These publications and recent ACCC activity demonstrate how the ACCC is actively regulating the making of ‘green’ or ‘environmentally-friendly’ marketing claims.

3. FoodLegal’s Compliance Course on Part V of the Trade Practices Act

FoodLegal has been involved in pro-active negotiations with the ACCC and been responsible for developing customised Trade Practices Compliance Programs specifically for the food industry. FoodLegal also reviews packaging and advertising materials prior to release in order to minimize exposure to Trade Practices Act liability.

A breach of Part V of the Trade Practices Act can be a huge cross to bear and can result in hefty fines, costly legal expenses and, even more damaging, corrective advertising, damage to product reputation and potential product recall.

FoodLegal is offering a full, one-day Trade Practices Compliance Program on Sections 52, 53 and 55 of the Trade Practices Act for non-lawyers, targeted at members of the food industry responsible for marketing to consumers. This course includes an in-depth exploration of Part V of the Trade Practices Act as well as food specific case studies and analysis of audio-visual advertising. The course will be held in Melbourne.

This course will also explain the relationships and legal frameworks but will not be focused on the Australia New Zealand Food Standards Code requirements.

Details:          Compliance Training on Part V of the Trade Practices Act
                     Includes 6 hour presentations, course materials and lunch.
                     Further details subject to confirmation.

Date:             Tuesday 25th November 2008.

Location:        Melbourne, Victoria

Price:             $880.00 (inc GST) per participant

Contact FoodLegal with your name, company and contact details to book your place, subject to payment and confirmation.