“The ACCC’s Compliance and Enforcement Policy lists credence claims as a new priority area, particularly those in the food industry with the potential to have a significant impact on consumers,” ACCC Commissioner Sarah Court said.
The watchdog is taking action against Luv-a-Duck Pty, claiming “false, misleading and deceptive conduct” in relation to the promotion and supply of its duck meat products.
It alleges that Luv-a-Duck fraudulently claimed on its packaging, website and brochures that its ducks were “grown and grain fed in the spacious Victorian Wimmera Wheatlands”, as well as a statement that its ducks were “range reared and grain fed”.
The ACCC alleges that the duck meat products sold or offered for sale by Luv-a-Duck were in fact processed from ducks that did not have substantial access to the outdoors, or access to spacious outdoor conditions.
Luv-a-Duck said in a statement its always cooperated with the ACCC, but it believes its statements are factual and not misleading.
"Luv-a-Duck does not accept the ACCC's allegations and believes the alleged offending statements are statements of fact and are not misleading or deceptive, nor are they likely to mislead consumers.”
Court, though, is adamant the watchdog has a case. “Consumers must be able to trust that what is on the label is true and accurate. Businesses need to make sure they are not misleading consumers into paying a premium for products that don’t match the claims made on the label,” she said.
This is the second time in less than a year the ACCC has initiated action against an Australian duck company, with Pepe's Ducks ordered to pay A$400,000 in penalties and costs by the Federal Court in December 2012 after claiming its ducks were “open range” and “grown nature's way”.
However, it is also the first time that ACCC officials have announced they will be targeting what it deems are credence claims.
And there is no coincidence about the timing. As pressures on businesses increase through higher ingredient prices and growing competition, as has been the case over the last year, managers can fall in the trap of stretching the truth too far even within a marketing, branding and advertising scene that allows a good deal of puffery.
In August last year, King Island Meatworks and Cellars was found guilty of misleading consumers through the “King Island” in its name and advertising material, when in reality its products were not from the Tasmanian beauty spot but from suburban Melbourne.
In September last uear, Rosemary Bruhn of Rosie's Free Range Eggs was fined A$50,000 for claiming cage eggs were “free range”.
Companies face a maximum fine of A$1.1 million per office for a misleading credence claim and individuals face a maximum fine of A$220,000 per offence. There have been some significant fines over the past year for misleading conduct, including five penalties of between A$1.95 million and A$3.61 million. All but one of these cases related to misleading advertising or labelling.
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