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

5 cornerstones of a strong digital culture

Creating a strong company culture may sound like a daunting task, but it’s actually pretty straightforward. In fact, company culture is created in exactly the same fashion as a religion or democracy. Behaviours created from the organisation’s inception are reinforced over time by leadership, attracting like-minded people and eventually reaching critical mass to become an accepted ‘truth’.

Anthony Stevens

Founder and CEO, Digital Asset Ventures

Should you rebuild your company’s tech stack in blockchain?

The question I get asked most regularly these days is: ‘Do I need to rebuild my company’s systems on Blockchain?’ And the answer, every time, is ‘No, you’re asking the wrong question’.

Michelle O'Keeffe

CEO, Engaging.io

Customer value proposition: Getting the brand promise to your customers right

Throughout my career, I have witnessed a litany of brand names that profess to have a unique customer value proposition (CVP). In reality, however, they’ve had little more than a ‘value proposition’: A simple list of benefits applied to a general audience.

Ric Navarro

Global director of marketing and communications, Norman, Disney & Young

RE: Sales and marketing SLAs, often the choke point isn't the teams but them getting the data into the tools they want to use with the da...

Ed Fry

Why sales and marketing alignment is more important than ever

Read more

Thank you for the good and very helpful information. It is very interesting. I love all the things you share and see your beautiful creat...

รัตนาวดี ภูมิวรรณ

Former eHarmony marketing chief joins telco startup

Read more

Colin Kaepernick, not Mike Kapernick.

thisisw

Zenith's innovation leader: Mid-digital age not benefitting media, brands or consumers

Read more

AGA KHAN HOSPITAL is in need of kidney donors for the sum of 2 crore, Contact us today if you want to sell your kidney for money, and thi...

Sebastian Friedrich

Mindshare gets behind blockchain advertising alliance

Read more

WelcomeThe world 's coolest Mercedes companyI am a personal addict on this carBut poverty does not allow me to watch on YouTube for us po...

amer hassan

ASX-listed GrowthOps appoints inaugural CMO

Read more

Latest Podcast

More podcasts

Sign in