‘Freshly baked’, ‘free-range’, ‘organic’. If these words appear on your labels, be warned – the consumer watchdog is looking for you.
This morning the Australian Competition and Consumer Commission announced seven suppliers of bottled water will remove the term ‘organic’ from its labelling and marketing and an eighth supplier withdrew its product from sale.
The problem comes from the simple fact water cannot be “organic”. The ACCC says companies using this term erroneously can often use it to inflate prices.
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The incident is just the latest in a string of attempts on behalf of the ACCC to police certain terms, such as ‘unlimited’, which has pushed several telecommunication businesses into warnings and fines.
The Active Organic, Lithgow Valley Springs Organic, Nature’s Best Organic, Organic Australia, Organic Falls, Organic Nature’s Best and Organic Springs products have been renamed.
“Credence claims such as ‘organic’ can be used to justify higher prices and create a competitive advantage for the user. As such it is essential that they are only used correctly,” ACCC deputy chair Delia Rickard said in a statement.
“Consumers are increasingly making purchasing decisions that value the types of claims that directly affect the integrity of the product, such as where or how something was made, grown or produced,” she said.
Rickard said manufacturers cannot hide misleading claims in their brand names.
“Organic standards acknowledge that water cannot be organic. Any claim that particular water is organic would therefore be misleading or deceptive,” she said.
But ‘organic’ isn’t the only term the ACCC has had a problem with lately. Here are a few more cases you should keep an eye on – especially if you’re using any of these terms:
Documents from an Australian Competition and Consumer Commission and Coles court case over the supermarket’s ‘freshly baked’ bread have revealed the grocery giant believes consumers should not interpret the word “baked” as “baked from scratch”, according to The Australian Financial Review.
In June, the ACCC launched proceedings against Coles for its use of the phrases “baked today, sold today”, “freshly baked in-store”, “freshly baked” and “baked fresh”, when it was revealed some of its products were actually partially baked in Ireland, frozen, transported and finished in-store.
The watchdog alleges these phrases were likely to mislead consumers into thinking the bread was prepared entirely from scratch in Coles’ in-house bakeries on the day it was offered for sale.
In Coles’ defence, the supermarket stated par-baked (partially baked) products were “commonly offered” for sale at supermarkets, restaurants and fast-food outlets.
Hall & Wilcox partner Sally Scott told SmartCompany when making a decision about the branding, packaging and promotional activities, businesses must consider whether or not a claim is misleading.
“This will firstly involve consideration of the overall impression conveyed to consumers and secondly whether that overall impression is misleading.
“Failing to analyse whether there are misleading claims at this time will be fraught with risk. Indeed, it would be a brave or naive business that proceeds with branding, packaging or promotional activities without giving sufficient consideration to whether they are making misleading claims,” she says.
‘Made in Australia’
Coles’ bread caught the attention of the regulator, but so has its fruit.
Earlier this month, Coles paid a $61,200 infringement notice for allegedly misleading advertising in relation to the origin of its kiwi fruit and navel oranges.
Coles had displayed the fruit under promotional price signs which read “Helping Australia Grow” with the triangular “Australian Grown” symbol. The fruit was correctly labelled with its country of origin on small stickers, however the ACCC believed the overall impression was the fruit had been grown in Australia.
Scott says the real issue is how consumers interpret the representation of a product, whether the conduct is accidental or intentional.
“With misleading conduct claims, the first issue is what overall impression is conveyed to consumers and secondly, whether that impression is misleading.
“Whether a term is used as part of a brand name or elsewhere in relation to a product, the issue is still what overall impression is conveyed to consumers and whether that impression is misleading,” she says.
Earlier in July an online Ugg boot trader was also found to have made false claims about the country of origin of its Ugg boots. Rather than being Australian made, the boots were manufactured in China.
The ACCC has also been cracking down on businesses over the claims their products are ‘free-range’.
Last week Baiada Poultry, Bartter Enterprises and the suppliers of Steggles chicken products were found by the Federal Court to have engaged in false, misleading and deceptive conduct by promoting their chicken products as ‘free range’.
On the product packaging and advertising the companies had advertised the chicken products as free-range, when in reality the chickens had little more floor space than an A4 piece of paper.
In March, the consumer watchdog also initiated court action against Australian duck company Luv-a-Duck for allegedly misleading consumers to believe its ducks has substantial access to outdoor areas.
Late last year duck business Pepe’s Ducks was found guilty of misleading consumers by claiming its ducks were ‘open range’ and ‘grown nature’s way’ and the Federal Court ordered it pay $400,000 in penalties.