Food Law Updates (disclaimers)

by Joe Lederman and John Gao © Lawmedia Pty Ltd, March 2008
FoodLegal
Australian Food Lawyers and Consultants

The latest developments in food law including:

A food manufacturer signs Undertakings with the ACCC in relation to fruit representations
A fruit trader signs Undertakings with the ACCC for breaching the Horticulture Code of Conduct
An unpasteurised milk product recalled
The latest developments in the Visy / Amcor cartel case
New calls for “junk food” advertising bans

ACCC accepts Undertakings from Tasti Pty Ltd

On 4 March 2008, Tasti Pty Ltd, a supplier of fruit snack bars to Weight Watchers, signed Undertakings with the Australian Competition and Consumer Commission to amend its packaging.

The ACCC claimed that certain representations made on the label in relation to fruit might likely mislead or deceive consumers when in fact the product contained 16% real fruit with the dominant flavour ingredient being only 1%-1.5% of the final product (ie 1%-1.5% raspberry in the “raspberry pie” product). The snack bar products comprised 60% biscuit casing and 40% filling.

While Tasti Pty Ltd was not asked to change the name of any of its products, Tasti has undertaken to:

Insert the words “flavoured filling” in the labelling;
Decrease the amount of fruit shown in the imagery on the front of the packaging; and
Amend the line “Bar sliced to show fruit filling” by removing the word “fruit”.

The ACCC therefore may have been concerned that the term “fruit filling” implies that the filling is made from 100% fruit.

The Undertaking by Tasti Pty Ltd is the latest in a string of claims by the ACCC against food manufacturers involving fruit representations on food labels.

The Undertakings from Tasti Pty Ltd are available on the ACCC website.

Fruit Trader agrees to Undertaking under the new Horticulture Code

On 13 March 2008, Erceg Holdings Pty Ltd signed Undertakings with the ACCC for an alleged breach of the Horticulture Code of Conduct.

The ACCC found that agreements between Erceg Holdings Pty Ltd and fruit growers did not comply with the Horticulture Code of Conduct. This Undertaking was the first breach of the Horticulture Code of Conduct publicised by the ACCC since the Horticulture Code of Conduct was passed on 13 December 2006 and came into effect on 14 May 2007. FoodLegal provided a critical review of the Horticulture Code of Conduct in the February 2007 issue of the FoodLegal Bulletin.
FoodLegal can provide professional legal advice on the compliance of horticultural supply agreements with the Horticulture Code of Conduct.

The Undertakings from Erceg Holdings Pty Ltd can be found on the ACCC website.

Unpasteurised Goats Milk Recalled

On 13 March 2008, a voluntary recall of unpasteurised goat’s milk was conducted by Gaybill’s Goat Dairy in Queensland after testing indicated the presence of Salmonella Zanzibar.

Unpasteurised goat’s milk in Queensland is subject to its own specific processing requirements under the Food Production (Safety) Regulation 2002.

As we noted in our FoodLegal Bulletin article on the Legal Ramifications in Supply of Unpasteurised Milk, even where the Standards or Regulations permit the supply of unpasteurised milk, this recall is a timely reminder that there is an overriding rule that the product must be in fact safe for human consumption.

Cadbury Schweppes Pty Ltd v Amcor Limited

On 19 February 2008, the Federal Court of Australia handed down a decision on an interlocutory dispute arising out of the Cadbury Schweppes Pty Ltd v Amcor Limited. The case is an ancillary damages claim by Cadbury Schweppes Pty Ltd against Amcor Limited following the Federal Court decision in November 2007 to fine Visy Industries Holdings Pty Limited $36 million for forming a cartel with Amcor. The Visy case was instigated by whistle-blowing from Amcor.

The 19 February 2008 decision relates to Cadbury Schweppes seeking access to documents supplied by Amcor to the Australian Competition and Consumer Commission (the ACCC) confessing to cartel activities. Amcor and the ACCC claimed that the relevant documents were subject to legal professional privilege and therefore inaccessible to Cadbury Schweppes.

The ACCC’s rationale for claiming privilege, and in effect helping to defend Amcor from a damages action, was to encourage cartel whistleblowers to come forward by ensuring confidentiality. This is despite the fact that if the ACCC’s actions had successfully defended Amcor from a damages claim, Amcor could have walked away from cartel behaviour without any fines or damages claims by simply cooperating with the ACCC.

It was claimed that three categories of documents existed in the case:

Documents submitted by Amcor to the ACCC for advice purposes;
Documents submitted by Amcor to the ACCC which had subsequently been served on Visy;
Documents produced by the ACCC and subsequently served on Visy.

The Court found documents in category 1 above were subject to privilege. However, documents in categories 2 and 3 (ie documents which Visy had been served with) were not subject to privilege. The Court also held that the public interest argument put forward by the ACCC of encouraging whistle-blowing had little or no merit.

The decision of the Federal Court in the Cadbury Schweppes Pty Ltd v Amcor Limited case can be found here.

The debate on junk food advertising

A global campaign has been launched aimed at reducing the marketing of “junk food” to children. A group of 50 consumer groups including CHOICE in Australia has backed an international voluntary code of conduct on junk food advertising. CHOICE in Australia has also called for increased regulation of “junk food” advertising to children. CHOICE has announced that it has made a submission to the Australian Communications and Media Authority on the review of Children’s Television Standards. CHOICE has called for:

Extending regulation to cover the promotion of food through all media including but not limited to television, radio, cinema, internet, text messages, product placement, ‘viral’ marketing, magazines, posters, billboards, sponsorship, product packaging and point of sale promotion.
Assessing products against a nutrient profiling system (such as the system developed by Food Standards Australia New Zealand) to determine whether they are healthy enough to be promoted directly to children.
Applying TV advertising restrictions during programs and times that most children are actually watching, not just children’s (C) programs that only a small number of children watch.
Restricting the use of celebrities, cartoon characters and sporting personalities to promote unhealthy foods to children, as well as competitions, giveaways and collectables that act as an incentive to buying these foods.

The CHOICE campaign coincides with a recent study by the Monash University Accident Research Centre which has found that 37% of children who meet the height requirements for car booster seats exceeded the maximum weight capacity of booster seats under current Australian Standards.
Information about the CHOICE campaign can be found on the CHOICE website.

A newspaper article (NEWS.com.au) on the Monash University Accident Research Centre study can be found here.

Previous FoodLegal Bulletin articles on the topic of junk food advertising to children can be found in the April 2007 issue and the December 2006 - January 2007 issue.