The ACCC has made very clear on a number of occasions including recently at the Australian Food and Grocery Council Annual Industry Leaders Forum that credence claims in the food sector has been a focus of the ACCC in the past few years and will remain a focus going forward.
This focus was demonstrated by a number of high-profile investigations in 2014 by the ACCC into misleading claims as to food origin. Some of the notable companies investigated were Carlton & United Breweries for their Byron Bay Brewing Co Pale Lager, Barossa Farm Produce for their Black Pig products and Maggie Beer Products in relation to various products not produced in the Barossa Valley in South Australia.
These well publicised (by the ACCC) investigations have brought home to many food and beverage companies the risks associated with inaccurate claims regarding their products. The costs of a contravention and investigation can be substantial (in lost staff time, change of labelling and potential loss of products which are incorrectly labelled) even if no penalty is sought by the ACCC. So how do you avoid a contravention and/or a penalty?
The best way to avoid a contravention or penalty is to:
- take steps to know and comply with the law;
- ensure that your labelling, packaging and marketing material does not make any false or misleading statements is the first step.
- implement a culture of compliance in your business; and
- interact with the ACCC (when necessary) in a co-operative way, preferably through experienced advisers or employees.
If your organisation has a comprehensive compliance programme and a culture of compliance the chances of a contravention are substantially reduced. If a contravention does occur, a culture of compliance should minimise the extent of the breach and will contribute to lower (or possibly no) penalties. A compliance program including a compliance policy, compliance manual and staff training will assist employees to know the law and to identify when and what statements and actions are likely to breach the ACL.
Finally, whenever any communication is received from the ACCC, ensure you immediately seek advice from an adviser experienced in dealing with the ACCC. The ACCC has powers to require the provision of documents and evidence on oath and there are penalties for non-compliance. Your adviser should understand the ACL and the powers of the ACCC, how the ACCC conducts its investigations and how to ensure an outcome which addresses the ACCC’s concerns and if at all possible, limits any penalties and costs to your business.
In the meantime you should consider taking steps to:
- review of your labelling and marketing materials to ensure all your claims are correct;
- ensure you have you have data to back up your product claims; and
- implement a compliance programme if you don’t have one or review of any existing compliance programme.
For more information contact our competition and consumer law specialist Rebecca Halkett.