A$2.25m fine for Heinz

Food manufacturer Heinz found guilty of making a misleading health claim about its Little Kids Shredz product.

Heinz Little Kids Shredz

Food manufacturer Heinz has been ordered to pay a multimillion-dollar penalty by Australia’s Federal Court after it was found guilty of making a misleading health claim about its Little Kids Shredz product.

Made in New Zealand, Little Kids Shredz were sold on both sides of the Tasman. In 2016, the product won one of our Bad Taste Food Awards. Product packaging promoted the jube-like snacks as “99% fruit and veg”.

The back of the box stated: “our range of snacks and meals encourages your toddler to independently discover the delicious taste of nutritious food”. But the snacks, targeted at children aged from 1 to 3, were more than 60% sugar.

In its judgement, the court ruled Heinz represented Shredz as beneficial to the health of young children, when this was not the case. It also found Heinz nutritionists should have known it was misleading to claim that a product containing about two-thirds sugar was a healthy choice.

The case was brought by the Australian Competition and Consumer Commission (ACCC) following a complaint by the Obesity Policy Coalition.

The ACCC had sought a penalty of $10m against the company.

“The Heinz Group is one of the largest food companies in the world. We will continue to advocate for stronger penalties to deter large companies from engaging in serious contraventions of Australia’s consumer laws,” ACCC chair Rod Sims said.

“The ACCC wants to ensure that penalties for breaches of the consumer law are large enough to get the attention of the financial markets, boards and senior management.”

Changes to Australian Consumer Law passed last week have increased the penalties that can be handed down by the courts from $1.1m to $10m. In comparison, the maximum fine under New Zealand’s Fair Trading Act is just $600,000.

As the Shredz product was sold on both sides of the Tasman, we’d like to see the Commerce Commission take action on behalf of New Zealand consumers.

The Heinz Shredz case provides an example of the marketing claims increasingly used by food manufacturers to make their products appear healthier than they really are. Court action here would send a clear message to companies that spruiking sugary products as nutritious choices risks breaching fair trading laws.

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