The Federal Court held that Heinz represented that three of its Little Kids SHREDZ fruit products were beneficial to the health of toddlers (aged 1–3 years) when the products were not beneficial to toddlers’ health due to high sugar content and sticky texture: ACCC v H J Heinz Company Australia Limited (2018) ATPR 42-588; [2018] FCA 360 at [315].
By doing so, Heinz engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) and made a false or misleading representation that the products had benefits in contravention of s 29(1)(g) of the ACL: [315], [275].
Constructive Knowledge
The court also held that “Heinz ought to have known that the representation that the Products were beneficial to the health of children aged 1–3 years was false or misleading”. The court was “satisfied that each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to the health of children aged 1–3 years was misleading”. Heinz also ought to have been aware that it was making such a representation: [312], [292], [315].
Packaging
The packaging of the Berries Product represented that it was a nutritious food and beneficial for the health of children aged 1–3 years. This was evident from the imagery, colours and wording. A not insignificant number (at the least) of ordinary reasonable consumers would have understood it in this way. An active healthy young boy was depicted climbing a tree, which conveyed natural and healthy growth. The prominent statement “99% fruit and veg” and prominent pictures of fresh fruit and vegetables gave impressions of nutritiousness and health. The impression of naturalness and goodness was reinforced by the words: “No preservatives” and “No artificial colours or flavours”. The description on the reverse side of the packaging emphasised that the Berries Product comprised 99% fruit and vegetables and was appropriate for toddlers “on the go”. This suggested that it had the “goodness” needed for active healthy children. Any suggestion from the word “treats” that the Product was a sweet treat was negated by the description of the Product as a “snack” within a range of “snacks and meals”. This implied that the Berries Product was a nutritious food. Heinz conveyed its aspiration to encourage a love of nutritious food, implying that the Berries Product was of that kind. The reference to Heinz’s “dedicated nutritionists who are also mums” implied that those responsible for the product knew that it was wholesome and nourishing. It lent credibility to the claim that the product was nutritious and healthy. In many ways, the Ingredients and Nutritional Information panels, which were in smaller font, were like “fine print”. The same reasoning and conclusions applied to the Peach Product: [104], [99]–[101], [262].
The Fruit and Chia Product box only used the word nutrition (or a variation of this word) twice, instead of four times. However, the two phrases “Just The Good Stuff” represented that it was nutritious. This was confirmed by the words “No Nasties” and the emphasis on the fruit ingredients. The packaging also represented that the product was beneficial to the health of children aged 1–3 years. It used the same images as the Berries Product. The repeated phrase “Just the Good Stuff” conveyed that the product was good for little children. This was reinforced by the statements “No artificial colours, flavours or preservatives”, “99% from fruit ingredients and chia seeds” and “Naturally sweetened with fruit ingredients”: [266]–[268], [79].
No breach of s 29(1)(a), 29(1)(g) (uses) or s 33
However, the court was not satisfied that any breach of s 29(1)(a) had been established because it was not clear how the terms “quality, value or composition” related to this case. Similarly, the court found that the s 29(1)(g) allegations of false or misleading representations that the products had “uses” were not established, because the ACCC had not particularized the term “uses”. Despite finding that the public would probably be misled, the court was not prepared to find the s 33 allegations established, because there was some uncertainty about the application of the concepts of “nature” and/or “characteristics” or “suitability” of the products in the context of the case: [274]–[276].
- Nutritious: The ACCC did not establish that the Berries Product was not nutritious. It had some of the nutrients necessary to sustain human life. The same applied to the Peach Product and the Fruit and Chia Product: [146], [262], [270].
- Equivalent nutritional value: The ACCC alleged that the packaging represented that the products were of an equivalent nutritional value to the natural fruit and vegetables depicted. The court was not satisfied that these representations were made. [23], [70]. “The ordinary and reasonable consumer may well have understood the package to convey a representation that the Product was nutritious in a way which was similar to the way in which fresh fruit and vegetables are nutritious and therefore good for toddlers. However, in my view, such a consumer would not have understood Heinz to be making a representation concerning the comparative nutritional value of the Berries Product, let alone a representation that its nutritional value was ‘equivalent’ to that of the depicted fruit and vegetables”: [68], see also [69].
- Healthy Habits: The box used the wording: “we aim to inspire a love of nutritious food that lasts a life time”. The court was not satisfied that ordinary reasonable consumers would have understood the Berries Product to be representing that it encouraged the development of healthy eating habits for young children. The aspirational nature of the claim was evident in the use of the word “aim”. The ordinary reasonable consumer was likely to understand the relationship between a continuing love of nutritious food and the development of healthy eating habits. However, such consumers would not readily think that a representation was being made that consumption of one processed product would encourage the development of healthy eating habits. The same applied to the Peach Product and the Fruit and Chia Product: [254], [250], [262], [269].
A hearing on penalties and other relief is pending
This case will be reported in CCH’s Australian Competition and Consumer Law Reporter and may be cited as ACCC v H J Heinz Company Australia Limited (2018) ATPR 42-588; [2018] FCA 360. It will be summarised in our table of “Case examples — Misleading representations about “benefits” of goods or services”.
See also: ACCC media release, “Court finds Heinz made a misleading health claim”, 41/18, 19 March 2018.
For more information on the above contact Joe Bonura on (02) 4626 5077 or jbonura@marsdens.net.au.
This article first appeared in the CCH Australian Tort, Personal Injury, Health and Medical Law Tracker and is reproduced in full with permission from CCH, a division of Wolters Kluwer Australia: www.wolterskluwer.cch.com.au
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
