Apr 17, 2018
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ACCC v Heinz: A significant win for public health

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In a significant victory for public health, Australia’s Federal Court has held that Heinz engaged in misleading and deceptive conduct in the marketing of a snack food targeted to toddlers (ACCC v Heinz [2018] FCA 360). The case should be seen as a win for public health not just because of the final outcome, but also because of the Court’s discussion of the World Health Organisation guidelines on sugar consumption, as well as parents’ purchasing habits and children’s health.

The case followed a complaint laid by the Obesity Policy Coalition in 2015 about the marketing of a product called “Shredz” which formed part of Heinz’s “Little Kids” range, targeted to children aged 1-3 years. This product consisted of a chewy fruit-flavoured “stick” that was sold in an 18g packet of five sticks. Each box contained five 18g packets of the product, which came in three flavours: berry, peach, and fruit and chia.

The packaging for each of the three flavours varied slightly, but each featured a stylized representation of a tree on the front of the box, with an image of a smiling boy climbing the ladder (see picture above). At the base of the tree was a photograph of various pieces of fruit, sweetcorn kernels, and pieces of pumpkin, along with a prominent depiction of four sticks of the product. Among the text on the front of the box were the words “99% fruit and veg”, “No preservatives” and “No artificial colours or flavours.” The back of the box included the text “Made with 99% fruit and vegetable juice and purees…. Our range of snacks and meals encourages your toddler to independently discover the delicious taste of nutritious food. With our dedicated nutritionists who are also mums, we aim to inspire a love of nutritious food that lasts a life time.” A side panel on the box stated that “Our wide range of snacks and meals is packed with the tasty goodness of vegetables, fruits, grains, meat and pasta to provide nutritious options for your toddler.”

The back of the box also featured an ingredients list and a nutrition information panel required by the Australia New Zealand Food Standards Code. The ingredients list revealed that the product contained 36% apple paste and 31% apple juice concentrate, with the remainder of the product comprising berry, peach, or strawberry puree (approximately 10%), sweetcorn puree (10%) ,and pumpkin puree (10%) (with the fruit and chia version also containing chia seeds). Due to the reliance on apple paste and apple juice concentrate, over two-thirds of the product consisted of sugar.

Before Justice White in the Federal Court, the Australian Competition and Consumer Commission (ACCC) alleged that the packaging of each product contravened ss 18, 29(1)(a), 29(1)(g) and 33 of the Australian Consumer Law, which is contained in a schedule to the Competition and Consumer Act 2010 (Cth).

Section 18 was the key provision in the case. It provides that “[a] person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive.” Section 29 provides that “[a] person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services (a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or… (g) make a false or misleading representation that goods or services has sponsorship, approval, performance characteristics, accessories, uses or benefits…”

Section 33 provides that “[a] person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.”

The ACCC alleged that Heinz had breached these provisions because statements and images on the box impliedly conveyed representations to the effect that the product:

  • Was of an equivalent nutritional value to the natural fruit and vegetables depicted on the packaging;
  • Was a nutritious food and was beneficial to the health of children aged 1-3 years; and
  • Encouraged the development of healthy eating habits for children aged 1-3 years.

At the outset, Justice White commented that the issue for the Court to determine was whether (a) the specific representations alleged by the ACCC were made, and if so, (b) whether they were misleading and deceptive (or in the case of s 33, liable to mislead). The Court was not required to determine other issues raised during the hearing, including whether the product had an inappropriate amount of sugar per se, and whether it would be sensible for parents to give the product to their children as an alternative to fruit and vegetables. The focus of the Court was on whether the product packaging made specific representations alleged by the ACCC, and if so, whether those representations were false and misleading.

Focusing on the berry version of the product, Justice White found that representations (a) and (c) above could not be established. However, Justice White held that the packaging would convey to the ordinary and reasonable consumer – here the ordinary and reasonable parent of a toddler – that the product was nutritious and beneficial to the health of toddlers (representation (b)).

For the purposes of the case, the ACCC had obtained internal documents from Heinz, which enabled scrutiny of the processes used to manufacture the product, and the way in which it was marketed. One of these documents discussed a “brand refresh,” which indicated that Heinz intended to use the product packaging to promote Shredz as nutritious and healthy.

However, Justice White held that “[e]ven a cursory examination of the packaging indicates that Heinz was promoting the Berries Product as being healthy and nutritious and that ordinary reasonable consumers would have understood that that was so.” [99] Imagery on the packaging, including depictions of a healthy young boy climbing a tree, combined with statements that the product comprised 99% fruit and vegetables, gave the impression of nutritiousness and health. The ingredient list and nutrition information panel (which indicated that Shredz comprised 60% sugar) would not detract from this overall impression, as they were on the back of the box, in smaller print, and could be regarded as “fine print.” Particularly in the context of a busy supermarket trip, ordinary, reasonable parents were likely to pass over them, “and to respond to the dominant message conveyed by the more prominent words and imagery.” [101]

Having established that the product packaging conveyed a representation that the product was a nutritious food and beneficial for the health of toddlers, Justice White then considered whether this representation was false and misleading. In determining this issue, Justice White made extensive reference to expert witness evidence led by the ACCC and Heinz. Central to the ACCC’s case was the evidence led by Dr Rosemary Stanton, a prominent Australian nutritionist. One of Heinz’s witnesses included a consultant nutritionist who had a “continuing association” with the Australian sugar industry, which was not disclosed in his written report, raising concerns about his independence.

In establishing that representation (b) was misleading and deceptive, the ACCC placed particular reliance on the fact that the product was high in sugar. Justice White held that while the ACCC could not establish that the product was not nutritious (given that it contained some nutrients necessary for human life), the high levels of sugar in the product were not beneficial to the health of toddlers. In coming to this conclusion, Justice White referred to the World Health Organisation’s 2015 guideline for sugar intake for adults and children, which recommends that intake of free sugars be reduced to less than 10% of total energy intake, (or conditionally, to less than 5% of total energy intake), in order to maintain a healthy weight and good dental health. “Free sugars” are defined to include those present in fruit juices and concentrates.

Evidence from Dr Stanton showed that one 18g serve of the product was 19% higher in sugar than one 100g serve of fruit and vegetables. Further, a single 18g serve of Shredz contained just under three teaspoons of free sugars, more than one half of the recommended daily intake of free sugars for 1-2 year olds, and over 35% for three year olds. Justice White also referred to statistics on sugar intake in Australia, including that 2-3 year olds have an average daily intake of free sugars of 9-10 teaspoons, well in excess of the WHO guidelines, and that the majority of free sugars are consumed from energy-dense, nutrient-poor “discretionary” foods and beverages.

Of particular influence on the judge’s decision was evidence of the role of free sugars in promoting tooth decay, given by an “impressive witness” with expertise in child oral health. Dental caries is prevalent among Australian children (with 48% of five year olds having tooth decay that requires treatment such as fillings), and poor diet  (particularly foods and beverages high in sugar) is a key contributing factor to dental decay. Justice White accepted evidence that consumption of the product would increase children’s risk of developing dental caries, due to its stickiness and high sugar content.

Justice White also accepted the ACCC’s submission that an assessment of the dental and other health risks posed by the product needed to take account of other aspects of a toddler’s diet (including that toddlers are likely to consume free sugars from other sources), rather than considering the dietary impact of the product in isolation, as argued by Heinz. This position illustrates the limitations of the food industry’s argument that there are no “bad” foods. When viewed in isolation, it could be argued that a product that contributes half of a child’s recommended sugar intake is not detrimental to health. But this argument is much less persuasive when we consider what a toddler is likely to eat over an entire day – even a child with a relatively healthy diet.

Given the high level of sugar contained in a single serve of Shredz, and taking into account the totality of children’s diets (and likely free sugar consumption from other sources), Justice White concluded that it was “not easy to accept that consumption of that amount of sugar in a single snack can be regarded as beneficial to the health of 1-3 year olds.’ This was particularly so given that excess weight and obesity are a significant problem among Australian children (with more than a quarter of Australian being overweight or obese), and having regard to the role of sugars in the development of dental caries, as well significant problems in achieving good hygiene practices among Australian young children. As the high levels of sugar in the product were not beneficial to the health of toddlers, Justice White concluded that the second representation was misleading and deceptive or was likely to mislead and deceive.

Accordingly, the packaging of the berry version of the product contravened s 18(1) of the Australian Consumer Law. Justice White also reached the same conclusion in relation to the packaging of the peach and fruit and chia versions of the product. The ACCC was not able to establish a contravention of s 29(1)(a) or s 33 of the ACC, but in showing that Heinz had made a misleading and deceptive statement about the healthiness of the product, Justice White held that it had also made a misleading or deceptive statement about the “benefits” of the product for the purpose of s 29(1)(g). Although not required for the purposes of establishing a breach of the relevant provisions, the ACCC also managed to establish that Heinz knew or ought to have known that it had made a representation that the productions were nutritious and beneficial to the health of toddlers, and that this representation was false or misleading.

The outcome of ACCC v Heinz is a clear victory for public health advocates who are concerned about the way in which unhealthy food products are marketed to children and their parents. The case illustrates the valuable role that World Health Organisation guidelines can play in the courts’ consideration of public health issues, in addition to evidence of the growing problems of obesity and poor dental health among Australian children. The case also demonstrates the natural affinities between childhood obesity prevention and improving children’s dental health, which could perhaps be exploited more fully by child health advocates.

However, the case does not address one of the key concerns about the marketing of unhealthy foods and beverages, which is the cumulative impact on children and parents of exposure to a large volume of perfectly legal and truthful food marketing campaigns, appearing in many times, forms, and places. While Australia has stringent restrictions on misleading and deceptive marketing, there is little regulation of the large volume of (truthful) marketing for unhealthy foods, exposure to which makes a small but significant contribution to childhood weight gain.

This problem, and potential solutions, will be discussed in my next blogpost.



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