Heinz hit with $2.25m in penalties for misleading advertising claims

The Federal Court of Australia follows up confirmation of the ACCC's allegations of misleading health claims with a $2.25m fine

The packaging used by Heinz
The packaging used by Heinz

Heinz has been hit with $2.25 million in penalties by the Federal Court of Australia for making misleading advertising claims about the nature of its Little Kids Shredz products.

The Australian Competition and Consumer Commission (ACCC) initially took action against HJ Heinz Company Australia in June 2016, alleging the FMCG had made misleading health claims that its Little Kids Shredz products were beneficial for young children aged 1-3 years. This, however, was not the case, with the product containing approximately two-third sugar.

In March 2018, the Federal Court confirmed Heinz had breach Australian Consumer Law by making such claims. The ACCC had initially sought a $10 million penalty. On 24 August, the courts ordered Heinz to pay penalties totalling $2.5 million, as well as establish a consumer law compliance program and pay the ACCC’s costs.

The ACCC said it’s carefully considering the judgment, with chair, Rod Sims, saying the watchdog was keen to ensure penalties for breaches of the consumer law are “large enough to get the attention of financial markets, boards and senior management”.  

“The Heinz Group is one of the largest food companies in the world. We will continue to advocate for stronger penalties to deter large companies from engaging in serious contraventions of Australia’s consumer laws, particularly now that Parliament has passed legislation substantially increasing the maximum penalties for breaches of the ACL,” Sims said in a statement.

In its initial proceeding against Heinz, the ACCC alleged the company made false and misleading representations, and engaged in conduct liable to mislead the public in relation to the nature, characteristics and suitability of its Little Kids Shredz products. These included statements claiming the product was ‘99 per cent fruit and veg’ and that the food was ‘nutritious’.

At the time, the ACCC pointed out the products contained upwards of 60 per cent sugar, a far greater ratio than an apple, for example, which is about 10 per cent sugar. Its actions followed a complaint made by the Obesity Policy Coalition about food products for toddlers that made such claims when they in fact were predominantly made from fruit juice concentrate and pastes which had much higher sugar content that raw fruit and vegetables.

In making its judgment in March 2018, the Federal Court found Heinz had made a misleading health claim that the product range, which includes three varieties, were beneficial for young children.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

3 skills you need to drive better collaboration

A study published in The Harvard Business Review found the time spent in collaborative activities at work has increased by over 50 per cent in the past two decades. Larger projects; complicated problems; tighter timeframes: These require bigger teams with specialised skillsets and diverse backgrounds, often dispersed globally.

Jen Jackson

CEO, Everyday Massive

Better the bank you know?

In 2018, only 21 per cent of customers believed that banks in general had their customers best interests at heart and behave ethically. Only 26 per cent believed that banks will keep their promises; views cemented further following the Hayne Financial Services Royal Commission.

Carolyn Pitt

Head of account management, Hulsbosch

What 15 years of emotional intelligence told us about youth media audiences

Taking people on an emotional journey through content is the most critical part of being a publisher. Which is why emotion lies at the heart of VICE Media.

Stephanie Winkler

Head of insights, VICE Asia-Pacific

That's an interesting use for biometrics, to actually assist in predictive analysis of campaign success.

Simon Smith

Facial recognition technology being used in a new out-of-home campaign

Read more

This journey would identify all your future life aspects!

Maryann Humphrey

Open Colleges: one-to-one journeys is the goal

Read more

It's a pretty good idea. I think this integration is useful. Don't you agree?

Misty Stoll

Officeworks hops on voice interface bandwagon with Google Assistant integration

Read more

ok. so no RCS support? by the way, RCS is a lot bigger than 5G in terms of marketing and monetisation so y'all should be covering it.

DragoCubed

Optus goes for education with 5G network campaign

Read more

Many companies and individual merchants have shifted their major part of marketing to web marketing services Portland as it weighs fewer ...

Radiata Solutions

6 Ways to ramp up Social Media to Your Web Design

Read more

Latest Podcast

More podcasts

Sign in