food labelling

Yo’ghurta be careful with food labelling! – Queensland Yoghurt fails to disclose gelatine ingredient

Published On 02/06/2020 | By Ben Morgan | Consumer protection, Enforcement

Queensland Yoghurt Company Pty Ltd (QYC) has landed itself in a real quandairy, having allegedly misled consumers by failing to disclose, from at least 2 July 2019, gelatine as an ingredient in some of its yoghurt products. With no sense crying over spilt milk, QYC has paid a penalty of $12,600 after being passed(-eurised) an infringement notice by the ACCC.

The ACCC alleged that by omitting gelatine (or CFT-1), QYC’s disclosed ingredient list was false or misleading in contravention of the Australian Consumer Law. Food manufacturers must comply with legislation including the Australian Consumer Law, the Food Standards Code Australia and New Zealand and relevant state legislation that requires labels to provide accurate information regarding a product’s ingredients.

“Consumers rely on accurate labels to make informed purchasing decisions,” ACCC Commissioner Sarah Court said. “QYC’s failure to disclose gelatine means consumers may have purchased its yoghurt products believing they did not contain gelatine… [t]his may be of particular concern to consumers who have chosen not to consume gelatine for dietary, religious, environmental or ethical reasons.”

The ACCC was udderley cowcerned that QYC’s failure to disclose gelatine could unfairly impact competition, stating that products within the food market are often differentiated by consumers based upon ingredients.

However, the payment of a penalty specified in an infringement notice is not an admission and does not represent a finding that the company in fact breached the Australian Consumer Law.

History of enforcement – the ACCC and food products

The ACCC has previously sought substantial penalties for false and misleading representations made in connection with food labelling and advertising, for example:

  • In 2016, the Federal Court imposed a $300,000 penalty on Derodi Pty Ltd and Holland Farms Pty Ltd t/as “Free Range Egg Farms” for falsely representing their eggs as free range. We have previously blogged about the ACCC’s focus on free range claims and its free range guidance.
  • In 2018, the Federal Court found that H J Heinz Company Australia Ltd made misleading representations as to the health benefits of its “Little Kids” range, in circumstances where some products contained up to two-thirds sugar.

The ACCC has also indicated its willingness to accept enforceable undertakings in relation to food labelling and advertising. In 2016, the ACCC accepted an enforceable undertaking from ALDI Foods Pty Limited and Monde Nissin (Australia) Pty Ltd t/as Menora Foods, to conduct regular testing to ensure that their products labelled as ‘Oregano’, were, in fact, entirely oregano. In 2015, the ACCC accepted an enforceable undertaking from Arnott’s Biscuits Ltd (Arnott’s) in circumstances where the ACCC considered that Arnott’s had misleadingly claimed that their new Shapes Light & Crispy contained 75% less saturated fat than original Shapes biscuits. In fact, Shapes Light & Crispy contained approx. 60% less saturated fat. Arnott’s undertook to (i) only make comparisons to third-party products where those comparisons are clear and appropriate, (ii) publish a correction of their misleading statements, and (iii) establish a compliance program to minimise the risk of future breaches of the provisions of the ACL concerning false, misleading or deceptive representations or conduct.  Arnott’s also paid five infringement notices totalling $51,000.

Food labelling is a continued focus area of the ACCC.  This enforcement action is consistent with the ACCC’s disclosed enforcement priorities for 2020, one of which is responding to misleading representations relating to food. For more information on the ACCC’s 2020 Compliance and Enforcement Policy Priorities, see here.

Image credit: The Greenery of a Mt Mee dairy-1= by Sheba_Also 43,000 photos / CreativeCommons and Flickr / CC BY-SA 2.0 / Remixed to B&W and resized  

About The Author

Ben is a solicitor in the competition litigation team in the Sydney office of King & Wood Mallesons.

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