Heinz has threatened to sue Dick Smith over claims made on Dick Smith Foods’ beetroot tins but the Aussie entrepreneur says he will stand up to the food giant.
In a letter sent to Smith, Heinz claims the wording on the labels for Smith’s beetroot is an “injurious falsehood” and is misleading and deceptive.
The label says, ”When American-owned Heinz decided to move its beetroot processing facility from Australia to New Zealand causing hundreds of lost jobs, we decided enough is enough.
”So we are fighting back against poor quality imported product.”
In its letter, Heinz demanded Smith re-label his beetroot cans within 14 days or face action in the Federal Court.
“The number of job losses occasioned by the transfer was minimal and not hundreds as stated by you,” Heinz stated.
Heinz also objected to Smith’s claims that its beetroot is an inferior product.
Smith told SmartCompany he stood by his claims but did not want the case to end up in court.
“I just thought, ‘not again’, because years ago Arnott’s took us to court about Tim Tam biscuits; they said it was too similar to Tim Tam and that cost us about $50,000 in legal fees and nearly sent us to the wall,” he says.
“I don’t want this to go to court. I won’t accept Heinz’s demand of pulling all their products back and relabelling.”
Smith says he is happy to make some changes to the beetroot tin labels and if Heinz will provide the exact figures of jobs lost he can amend it to that.
“I said we are fighting back against poor quality product. I am happy to change that to bad tasting as New Zealand is no good at growing beetroot,” he says.
Smith says Dick Smith Foods beetroot has been on sale for five months but Heinz has only chosen to take action now as the beetroot is “walking off the shelves” even though it is 30 cents more expensive than the Heinz product.
Smith would not give sales figures for the beetroot but said last year Dick Smith Foods had sales of $8 million and this year was on track to increase that by 300% to $24 million.
He accused Heinz of being ashamed of its beetroot being made in New Zealand and says the company tries to hide this.
“The Made in NZ is so tiny you would need a magnifying glass to read it. We are proud to be made in Australia, Heinz is ashamed,” he says.
Andrew Hewett, spokesperson for Heinz, told SmartCompany Heinz threatened legal action as it took exception to the “inflammatory nature” of the label on the Dick Smith canned beetroot products.
“We found it unfortunate that in order to try and promote sales of his own products, Dick Smith felt the need to reference other brands in the market rather than relying on the attributes of his own products,” he says.
Hewett said Heinz wrote to Smith privately to point out what it says are errors in the labelling.
“In an effort to effectively gain free advertising for his own products, Dick Smith chose to forward a private letter to the media,” he says.
“We are not interested in furthering Dick Smith’s efforts to gain publicity and therefore will refrain from making any further comments.”
But Smith says the Heinz letter was not private and it was Heinz who created the whole dispute not Smith.
“You’ve got to be joking. Heinz wrote the letter of demand, it created the whole thing,” he says.
“A letter threatening legal action is a private letter? I have never heard that before, that was an absolute threat following exactly what Arnott’s did.”