Examining the role of industry self-regulation in food marketing

By Joe Lederman and Charles Fisher
FoodLegal Lawyers and Consultants
© Lawmedia Pty Ltd, April 2010

Complaints in February 2010 against a food company for breach of the Advertising Association of National Advertisers voluntary codes of conduct have highlighted weaknesses in the enforcement powers of the Advertising Standards Board and its power to regulate on moral or social considerations.

The role of the Advertising Standards Bureau (ASB) in food advertising

The Advertising Standards Bureau is an industry-sponsored agency that acts as a secretariat for two boards empowered with monitoring compliance of the advertising industry to its own standards. The Advertising Standards Board has power to make determinations as to whether  an advertisement create by any member of the Advertising Association of National Advertisers (AANA) is in breach of the Codes of Conduct to which all AANA members are signatories.

In contrast to the Advertising Standards Board, the Advertising Claims Board makes determinations as to truth, accuracy and legality of any advertisement and is intended to be an alternative process to litigation for competitors to resolve disputes.

The four main codes of conduct that can apply to food marketers are:

The Advertising Standards Board can also make determinations as to whether a signatory to the Advertising Food and Grocery Council’s (AFGC) Responsible Children’s Marketing Initiative (RCMI) are in breach of the RCMI’s Guidelines. There are far fewer companies that are signatories to the RCMI compared to the number of AANA members. As at April 2010, the RCMI had 18 signatories.

Previous FoodLegal Bulletin articles have explored aspects of the ASB’s involvement and interaction with food marketing, including “Junk food advertising ban or another advertising gap?” (November 2008 FoodLegal Bulletin) and “Legal Avenues for Fighting ‘Binge Drinking Culture” (March 2008 FoodLegal Bulletin).

No filter on complaints, an illustration of wide Advertising Standards Board jurisdiction

There were a number of complaints lodged by food consumers with the Advertising Standards Board against Hungry Jacks between August 2009 and February 2010. Many of these complaints were ultimately dismissed, in determinations by the Advertising Standards Board, such as the complaint that an advertisement for the “Angry Angus” burger featuring an angry Scotsman which a consumer alleged was being discriminatory against people of Scottish nationality. The Advertising Standards Board found that Scottish people would be unlikely to be offended by the advertisement and that the advertisement would be unlikely to encourage copycat behaviour (i.e. to encourage Scottish pipe bands to march through fast food drive through paths).

This example simply demonstrates the breadth and wide variety of complaints received by the Advertising Standards Board and seems to indicate that the Advertising Standards Board might not be screening complaints as part of its process, choosing instead to accept every complaint and then make a determination.

“Prevailing Community Standards”

This is possibly because the AANA codes of conduct actually encourage the Advertising Standards Board to accept the role of making social and moral determinations. For example, the AANA Code of Ethics, the AANA Food and Beverages Code and the AANA Code for Advertising and Marketing Communications to Children all prohibit making representations that would be contrary to “prevailing community standards”. The AANA Food and Beverages Code defines “prevailing community standards” as:

the community standards determined by the Advertising Standards Bureau as those prevailing at the relevant time, and based on research carried out on behalf of the Advertising Standards Bureau as it sees fit, in relation to the advertising or marketing of Food or Beverage Products taking into account, at a minimum, the requirements of the Australia New Zealand Food Standards Code, the Advertising Dietary Guidelines as defined by the National Health & Medical Research Council and the National Physical Activity Guidelines as published by the Federal Government of Australia.

This involvement by the Advertising Standards Board in determining “prevailing community standards” allows the Advertising Standards Board to tackle certain issues in advertising that may not in fact be in breach of any mandatory law or regulation. For example, the Advertising Standards Board might consider an advertisement satirising suicide to be contrary to “prevailing community standards”, even when the advertisement does not breach any law or mandatory code.

Advertising Standards Board enforcement powers in the Hungry Jacks complaint

On 10 February 2010, the Advertising Standards Board made a determination in relation to a consumer’s complaint made about an advertisement for a Hungry Jacks “kids club meal”. The advertisement was for a kids club meal made up of three chicken nuggets and a bottle of spring water which came with a free toy featuring The Simpsons.

The complaint alleged that the advertisements breached the Advertising Quick Service Restaurant Industry Initiative for Responsible Advertising and Marketing to Children.

First of all, the meal had failed to meet the Nutrition Criteria for children’s meals contained in the QSR. The meals contained too much saturated fat.

Secondly, the complaint alleged that a “meal” had to contain a “main” and contended that three nuggets and no fruit or vegetables could not amount to a “main”. The complainant substantiated this argument with the fact that Hungry Jacks’ websites lists three nuggets as a “side”.

Thirdly, where a product does not meet the Nutrition Criteria, Clause 4.2 of the Advertising Quick Service Restaurant Industry Initiative (QSR) prohibits the usage of popular personalities or licensed characters to market those failing products.

The irony is that a similar complaint had been made about a similar advertisement in December 2009. Hungry Jacks had admitted it had breached the Nutrition Criteria of the QSR, the Advertising Standards Board upheld the December complaint and Hungry Jacks stated that the advertisement had been pulled from the air.

Notwithstanding the Advertising Standards Board determination, it would seem Hungry Jacks then screened a modified version of the same advertisement with less exposure to the toy. The food product had not changed nutritionally and was still using a popular personality to market it. Despite exercising its power of determination, the Advertising Standards Board was clearly not legally able to compel the company to cease from making a similar representation.

In the circumstances where an advertisement is misleading or deceptive or otherwise illegal, the Advertising Competition Consumer Commission or other relevant government authority would have the power to act. However where the sole regulatory document is a voluntary code of conduct, it appears there is little to force food companies to depart from marketing in the same way – even if they are risking bad publicity.

The February 2010 complaint was upheld, just as the December 2009 complaint was. Hungry Jacks responded to the second determination by the Advertising Standards Board as follows:

Thank you for your notice, the advertisement in question has been withdrawn and I can further assure you there will be no recurrence of the breach.

It is understandable that companies that are financially committed to their advertising campaigns are reluctant to drop a campaign halfway through it – especially if the advertising production cannot be replaced in a short time frame such as in the lead up to the Christmas selling period.

The “premiums” argument

The complaint in the Hungry Jacks instance also raised the issue that the giving away of a free toy with the kids club meal constituted a “premium”, or an offering of something free or at a reduced price conditional on the purchase of the children’s product.

The concept of a "premium" within the AANA Codes is something on which FoodLegal can advise in further detail.

The Advertising Standards Board upheld its earlier position that the toys were an “integral part” of the product (namely the kids club meal) and hence outside the definition of a “premium” within the meaning of the AANA codes.

Different signatories, different standards

The limited effectiveness of the Advertising Standards Board is not necessarily confined to the question of its enforcement powers. The jurisdiction for making a determination of breach depends entirely on which code the food company in question is a signatory to, if any.

Had Hungry Jacks not been a signatory to the QSR, the advertisement would have been assessed in relation to the other AANA codes and perhaps found not to be in breach at all, given that the other codes refer to “healthy lifestyle” and “prevailing community standards” without including the strict nutritional criteria of the QSR.

This is general information rather than legal advice and is current as of 12 Dec 2015. We therefore recommend you seek legal advice for your particular circumstances if you want to rely on advice or information to be a basis for any commercial decision-making by you or your business.