Truth in Advertising: Arnott's Fined for Alleged Misleading Claims
Tuesday 24 November 2015 @ 11.13 a.m. | Legal Research | Trade & Commerce
It has been reported in a recent ACCC Media Release that Arnott’s Biscuits Ltd (Arnott’s) has paid penalties totalling $51,000 following the issue of five infringement notices by the Australian Competition and Consumer Commission (the ACCC) relating to representations made by Arnott’s about its Shapes Light & Crispy product. Arnott’s also provided a court enforceable undertaking to the ACCC.
Background to the Action
Arnott’s represented on the packs of four varieties of Shapes Light & Crispy and a multipack between October 2014 and July 2015 that Shapes Light & Crispy contained “75% less saturated fat” than Arnott’s’ original Shapes biscuits, when in fact it contained approximately 60 per cent less saturated fat than original Shapes.
In making the “75% less saturated fat” representation, Arnott’s was actually comparing its Shapes Light & Crispy product not to original Shapes but to potato chips cooked in 100% palm oil.
Despite this comparison being declared in the fine print at the bottom of the packs, it was inappropriate because only 20 per cent of potato chips sold in Australia, was cooked in palm oil.
Comment from the ACCC
The Chairman of the ACCC, Rod Sims said of this matter:
“Consumers should be able to trust the claims that businesses make to sell their products. Small print disclaimers cannot correct false or misleading representations which are made in a prominent way in advertising or on packaging. Businesses must ensure that any comparison claims they make are accurate and based on meaningful comparisons for consumers. This is particularly the case regarding claims that involve healthier eating. Truth in advertising, particularly where misleading claims are made by large businesses, is a priority enforcement area for the ACCC.”
Reaction from Arnott’s
An Arnott's spokeswoman said the company conceded it had failed to make clear to shoppers the product was being compared to potato chips. It also acknowledged the watchdog's concerns about the appropriateness of the comparison:
"Arnott's believed that consumers were familiar with this claim due to its long term use on some potato chips. Unlike the original Shapes range, the Light & Crispy range contains potato flakes and has a taste, texture and appearance similar to potato chips."
As well as the packaging, Arnott's pushed the claim via television commercials, websites, various points-of-sale and on social media, including YouTube and Facebook.
Penalties imposed on Arnott’s
Arnott’s has provided a court enforceable undertaking to the ACCC that it will not engage in similar conduct for a period of three years. It will also publish a corrective notice on its website and in the nationally published Foodmagazine.
The ACCC issued the infringement notices to Arnott’s because it had reasonable grounds to believe that Arnott’s made a false or misleading representation about the composition of Shapes Light & Crispy, in breach of the Australian Consumer Law [contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)].
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Sources:
Arnott's Biscuits fined by ACCC for misleading fat content claim on Shapes – Article from smh.com.au
Arnott's pays $51,000 for alleged misleading claims about the saturated fat content of Shapes – ACCC Release MR 229/15
