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

The purpose of purpose

Everyone knows the 4 P’s of marketing: Price, product, promotion and place. There is now a fifth ‘P’ in the marketing mix.

What does it take to be an innovation leader?

To thrive in an increasingly complex and unpredictable new world, organisations will need to innovate, and leaders will require the necessary skills to do so. Here,

Evette Cordy

Co-founder, Agents of Spring

3 marketing mistakes to overcome when courting prospective customers

Marketing that urges respondents to ‘buy now’ is a little like asking someone to marry you on your first date. At any time, only 3 per cent of the market is looking for what you’re selling, so the chances of your date randomly being ‘The One’ is pretty slim.

Sabri Suby

Founder, King Kong

Social Media is platform where people get connected to each other from the world and share their views and thoughts on any product. Socia...

Tejas Potfode

6 Ways to ramp up Social Media to Your Web Design

Read more

We can't overlook mobile. Each passing day people are on their phones more and more

This Is My South Bay

What the 5G revolution will do to mobile marketing

Read more

An article largely re-purposed from things other people have said 5+ years ago – what's more, they said it better.

hogwash

The purpose of purpose - Brand science - CMO Australia

Read more

talking about the 4 p's:https://www.tripleclicks.co...

kigoma divin

The purpose of purpose - Brand science - CMO Australia

Read more

Interesting blog, good information is provided regarding Design Thinking For Business Strategy. Was very useful, thanks for sharing the b...

Tanya Sharma

Is design thinking the answer for the next generation of marketing?

Read more

Latest Podcast

More podcasts

Sign in