Organic head appointed to ACCC

Australian Organic has announced CEO Niki Ford has been appointed to the Australian Competition and Consumer Commission’s (ACCC) Agriculture Consultative Committee (AgCC) and will also join the National Farmers’ Federation (NFF) Diversity in Agriculture Leadership Program 2020.

As part of the ACCC, the AgCC provides advice and information on issues affecting the agriculture sector. Members are drawn from a range of backgrounds and industries within the agriculture sector including peak bodies, industry associations, and industry advisors. Members typically hold office for a period of two years.

As representative for Australian Organic, Ford will join the AgCC’s current membership committee of 22 other key industry organisations including WoolProducers Australia, Grain Trade Australia, and the Australian Food and Grocery Council.

Members provide input on issues and processes affecting the agriculture sector that fall within the scope of the Competition and Consumer Act 2010; emerging issues or market developments of concern to the agriculture sector; information dissemination strategies and appropriate networks available to enhance communication with the agriculture sector, and other issues as requested by the ACCC.

“To be invited to join the AgCC is a huge honour and is exciting for Australian Organic to now have a seat at the table with representatives from other top industry bodies,” said Ford. “This year we will be fighting for domestic regulation to be enforced for the organic industry in Australia so being part of the committee will enable us to discuss this, along with other issues, in greater depth.”

Ford will also commence with the NFF’s Diversity in Agriculture Leadership Program 2020. Selected from more than 80 applicants, Ms Ford is one of 12 outstanding women who will be mentored over the course of a five-month one-on-one program working with some of Australia’s most experienced leaders. Now in its third year, the mentors will assist the selected applicants in defining and planning their leadership aspirations.

The 2020 mentee group hails from across the nation and boasts a broad range of expertise from science; research and development; farm health and safety; education; and farm business management.

“As the CEO of Australian Organic, the peak body for the organic industry, Niki has a passion and a vision for the future of Australian agriculture, and we’re delighted to have her join this year’s program.” NFF President Fiona Simson said.

Simson added the program is helping to make serious inroads towards this. “Graduates of the 2018 and 2019 programs have gone on to assume federal and state government-based board roles and to be high-profile female advocates and leaders of our sector.”

ACCC okays Chinese dairy acquisition

The Australian Competition & Consumer Commission (ACCC) has given the nod to China Mengniu Dairy Company Ltd (Mengniu) for the proposed acquisition of Lion Dairy & Drinks Pty Ltd (Lion D&D).

“Mengniu Dairy was already looking for opportunities to diversify its business and expand its brand presence in the emerging markets. The transaction will allow Mengniu to enhance its presence in the Australian market and strengthen its portfolio by leveraging Lion’s longstanding brand presence and manufacturing and cold chain distribution hold across Australia. The transaction will strengthen Mengniu with a stronger foundation to excel in the Asia-Pacific (APAC) region,” said Shagun Sachdeva, consumer insights analyst at GlobalData, a  data and analytics company.

Mengniu has recently completed the $2.2bn takeover of infant formula company Bellamy’s Australia, in line with its aggressive acquisition strategy. The series of acquisitions will create greater synergies for the group not only from the geographical footprint point of view but also from the supply chain perspective as well.

At the same time, Lion has been trying to sell its dairy portfolio since 2018, which comprises of Big M, Pura, Dairy Farmers, Berri and Daily Juice brands. In October last year, Lion sold its specialty cheese business to Saputo Dairy Australia, with plans to focus on high-margin alcoholic beverage and premium non-alcoholic drinks in Australia and New Zealand.

“According to Global Data, the APAC dairy and soy food sector is forecast to grow from $194bn in 2018 to $254bn in 2023, registering a compound annual growth rate (CAGR) of 5.5 per cent,” said Sachdeva. “Milk was the largest category in the APAC dairy and soy food sector, followed by drinkable yogurt and cheese. The Australian dairy and soy food sector is expected to reach from $12.1bn in 2018 $14.8bn in 2023.

“The news of getting a green signal from ACCC comes at an extremely delicate time when China is going through tough times because of coronavirus and hence, it will be interesting to see how the deal will pan out in the future.”

SMC launches its first smart actuation sensor

SMC has introduced its first smart actuation sensor that can detect the stroke position of air cylinders at all times – with continuous feedback. The D-MP is available in three types of outputs – analogue signal, IO-Link process data and flexible switching point.

As the latest addition to its comprehensive range, the D-MP highlights SMC’s commitment to seeking new ways to make customer’s lives easier and to optimising operating efficiencies.  The D-MP offers the reassurance of consistent and continuous accuracy and control. The analogue output of the actuator position has a voltage output range of 0 to 10 V and a current output of 4 to 20 mA. Here, all three outputs benefit from four measurement modes within a range of 0mm to 200mm.

The functionality of the D-MP means that multiple auto-switches can be replaced by one actuator position sensor, reducing the number of components needed. Being IO-Link compatible, D-MP gives operators access to detailed data and flags up any issues with an internal error warning. Its plug and play design delivers further cost and labour efficiencies with less hardware required and a reduced risk of programming errors.

The switching point offers normal and reversed outputs and four measurement modes – single point, auto switch, window and 2-point. It has an on/off position function, so that it is possible to define multiple switching points in the smallest of spaces. Offering this level of functionality and control, the D-MP is suitable for a wide range of applications such as measuring various parameters including length and width discrimination or screw-in depth of machined holes.

This component is IP67 certified and can withstand hazardous environments.
SMC operates in 83 countries, with a research and development engineering team of 1,450 and an 8,200-strong sales force. To deliver automation solutions for its diverse customer base, SMC offers more than 12,000 basic products with more than 700,000 variations.

ACCC calls for regulatory reform to assist dairy farmers

The ACCC has released the final report arising from its dairy inquiry, which includes the key recommendation that a mandatory code of conduct be implemented to improve contracting practices between dairy processors and farmers.

The inquiry was initiated by Treasurer Scott Morrison, in response to large and retrospective reductions in milk prices imposed by two major dairy processors in April 2016. The inquiry involved extensive investigations, consultation and data analysis over a period of 18 months.

“A mandatory code of conduct would address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors,” ACCC Commissioner Mick Keogh said.

“Currently, processors can impose milk prices and other terms of milk supply contract terms that are heavily weighted in their favour. Some milk supply contracts also contain terms that restrict farmers’ ability to change processors for a better offer.”

“These issues ultimately harm dairy production efficiency and reduce the effectiveness of competition between processors,” Mr Keogh said.

The ACCC explored ways to address these concerns and found the existing provisions of the Competition and Consumer Act (2010), the dairy industry’s voluntary code of conduct, or a prescribed voluntary code would be inadequate.

“A mandatory code would improve the quality of information and price signals available to dairy farmers, enable fairer allocation of risk and enhance competition by removing switching barriers. While introducing a code won’t fully correct the bargaining power imbalance, it will reduce some of the negative consequences,” Mr Keogh said.

The inquiry also analysed the impact on the dairy industry of $1 per litre milk, first introduced by major retailer in 2011.

“Dairy farmers are understandably frustrated the retail price of milk has declined in real terms, since retailers adopted their milk pricing policies. The price set by retailers is arbitrary and has no direct relationship to the cost of production for the supply of milk,” Mr Keogh said.

“In examining the impact of this on farmgate prices, however, the ACCC found almost all contracts for the supply of private label milk allows processors to pass through movements in farmgate prices to supermarkets. Therefore, there is no direct relationship between retail private label milk prices and farmgate prices.”

“Therefore, if supermarkets agreed to increase the price of milk and processors received higher wholesale prices, processors would still not pay farmers any more than they have to secure milk,” Mr Keogh said.

“Given this, the ACCC believes that increases in the supermarket price of private label milk are unlikely to increase the farmgate prices received by farmers, unless farmers have improved bargaining power in their negotiations with processors.”

The ACCC also recommends increased transparency in milk price offers made by processors to farmers, and the removal of barriers to farmer’s switching, such as delayed loyalty payments and extended notice periods.

Dairy advocate tells ACCC to keep industry relations simple

Responding to the Australian Competition and Consumer Commission’s (ACCC) interim dairy industry review, advocacy group Dairy Connect has called for simplified, single document contracts between dairy processors and producers.

The ACCC invited responses from industry stakeholders and the community following the release of the regulator’s interim findings on changes needed in dairy industry relationships and behaviours late last year.

Dairy Connect CEO Shaughn Morgan said the organisation had responded to the eight strong recommendations from the ACCC that were contained in their interim report.

He said that it was critical that industry now embraced changes designed to underpin and grow dairy’s contribution to regional economies and to the national economy.

“We submitted that this was a ‘once in a generation’ opportunity for positive collective change to occur,” he said.

Dairy Connect Farmers Group President, Graham Forbes said the dairy industry has been under sustained pressure during the past 10 years and it is evident that systemic and fundamental change was required to underpin dairy’s future.

“In the submission, we supported the development of a commodity milk price index, a federal government initiative announced last year by the Deputy Prime Minister Barnaby Joyce and which is currently awaiting further development, this should be progressed without delay” Forbes said.

“We strongly indicated that mechanisms that will help producers make informed decisions regarding farm-gate pricing should be strongly supported by industry players and governments.”

The Dairy Connect submission recommended to the ACCC that processor / supplier contracts should not prevent suppliers from switching processors to optimise farm-gate income.

Other recommendations included independent dispute mediation; full consideration by farmers of contracts they plan to enter; and processors should make available improved price information.

Dairy Connect argued that while the existing voluntary code of conduct should be strengthened in the short term, the ACCC should ‘seriously consider’ a mandatory code of conduct governing processor / supplier relationships and behaviours.

Shaughn Morgan said the dairy industry has been under sustained pressure during the past years and it is evident that systemic and fundamental change was required to underpin dairy’s future.

“Over the years, there have been many reviews of the dairy industry, but the current ACCC activity can work as a mechanism to provide guidance and direction as well as providing an opportunity for stakeholders to embrace change,” he said.

“Failure to change may result in the decline of the dairy industry’s importance to Australia’s regional and national economies.”

ACCC urges Horticulture Industry to comply with code

The Australian Competition and Consumer Commission is putting growers and traders in the horticulture industry on notice that they need to take steps to comply with the 2017 Horticulture Code of Conduct, or face penalties and fines.

Addressing the 2017 NSW Farmers Horticulture Forum today, ACCC Commissioner Mick Keogh called on growers and traders to familiarise themselves with the Code and to ensure their businesses are compliant.

Since the revised Horticulture Code was introduced on 1 April 2017, the ACCC has worked with industry associations to educate growers and traders about their rights and obligations. The next stage of the ACCC’s work in relation to the Code will be to begin compliance audits.

“Later this year the ACCC plans to use its investigative powers to check the industry’s level of compliance with the Horticulture Code. If Code breaches are detected, the ACCC may take enforcement action,” Keogh said.

“The Code is designed to offer new protections for growers and traders. We want the horticultural industry to understand that breaching the Code could mean facing an infringement notice or court action.”

Mr Keogh said Courts could impose penalties of up to $63,000 for serious breaches of certain sections of the Code. For other smaller breaches, the ACCC can issue infringement notices to the value of $10,500 for body corporates and $2,100 for individuals.

“The revised Code aims to address much of the commercial uncertainty that has existed for many years in these markets, and which numerous inquiries and reports have identified,” Keogh said.

“While the ACCC will continue to educate the industry about the revised Code, businesses are now on notice that ensuring compliance with industry codes, including the Horticulture Code, is a priority for the ACCC.”

Lambie pushes for Senate Inquiry into dairy industry

Independent senator Jacqui Lambie has called for a Senate Inquiry into the dairy industry, claiming this is the best way to uncover illegal activity in the sector.

As News.com.au reports, Lambie told parliament on Tuesday that the investigation being carried out by the Australia Competition and Consumer Commission (ACCC) was a “sly way of covering up wrongdoings” in the industry.

The ACCC inquiry, announced by Agriculture Minister Barnaby Joyce last week, follows the April decisions of the two major dairy processors, Murray Goulburn and Fonterra, to retrospectively cut the price it pays suppliers for milk. As a result, most dairy farmers involved are in a perilous financial position and many don’t expect to survive.

As The Weekly Times reports, ACCC chairman Rod Sims dismissed the claims that the inquiry will not achieve anything.

“I doubt there’s been anything of this level (in agriculture) before,” he said.

“Murray Goulburn and Fonterra has triggered the fact the Government would like this to be a warts-and-all look.”

The inquiry can, by law, compel companies and people to give evidence and provide documents.

Product recalls up every year for the last five: ACCC

Product recalls for the 2015 – 2016 financial year were up by 14 per cent, a trend the ACCC called “concerning”.

As Fairfax reports, while the most recalled category was cars with 182,  food and grocery products (123, up from 71) accounted for the second largest number of recalls. In addition, hobby, sport and recreation saw 79 recalls (up from 44).

Overall, there were 670 recalls, up from 596 the previous year.

Deputy chair of the ACC, Delia Rickard, said the rise in recalls for the year was “concerning”.

“Recalls have been trending up every year for the last five years,” the ABC quotes her as saying.

“More and more, we are seeing suppliers seeking to keep costs down, sourcing from overseas countries without having direct oversight of every step of the supply chain.”

ACCC takes action against Heinz over ‘healthy’ toddler food

The consumer watchdog is taking action against Heinz for claiming a food which contains 60 per cent sugar is good for toddlers.

The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court against Heinz in relation to its Little Kids Shredz products.

The Shredz products’ packaging features prominent images of fresh fruit and vegetables and statements such as ‘99% fruit and veg’ and ‘Our range of snacks and meals encourages your toddler to independently discover the delicious taste of nutritious food’.

The ACCC alleges that these images and statements represent to consumers that the products are of equivalent nutritional value to fruit and vegetables and are a healthy and nutritious food for children aged one to three years, when this is not the case.

“The ACCC has brought these proceedings because it alleges that Heinz is marketing these products as healthy options for young children when they are not. These products contain over 60 per cent sugar, which is significantly higher than that of natural fruit and vegetables – for example, an apple contains approximately 10 per cent sugar,” ACCC Chairman Rod Sims said.

The ACCC is seeking declarations, injunctions, pecuniary penalties, corrective notices and costs.

 

ACCC slugs Cereal Partners $32,400 for ‘misleading’ Uncle Tobys Oats claims

Cereal Partners Australia (CPA), the manufacturer and distributor of Uncle Tobys brand oats, has paid penalties of $32,400 in relation to alleged false or misleading representations about the protein content of certain Uncle Tobys brand oats products. This followed the issue of three infringement notices by the Australian Competition and Consumer Commission.

The packaging of Uncle Tobys ‘Quick Sachets’ oats contained the statement ‘Natural Source of Protein* Superfood’, and the packaging of Uncle Tobys ‘Traditional Oats’ contained the statement ‘Naturally Rich in Protein* Superfood’.  The product packaging in each case contained the disclaimer “*when prepared with [1/2 or 2/3] cup of skim milk”, which appeared in fine print below the misleading statements.

These representations were also made in a television commercial promoting Uncle Tobys oats products, which contained a similar fine print disclaimer.

The ACCC alleged that by: combining the words ‘natural source’ / ‘naturally rich’, ‘protein’ and ‘superfood’ in the statements on the packaging and in a television commercial; and presenting the word ‘protein’ prominently in the centre of the front of the packet in a bright colour and in large font sizes,cCPA made false or misleading representations that the oats in these Uncle Tobys products contained a significant amount of protein, when this is not the case.

“Consumers should be able to purchase food products based on accurate health and composition claims. While the ACCC acknowledges that oats have many health benefits, on their own they are not high in protein, contrary to the representations made about these Uncle Tobys products,” ACCC Chairman Rod Sims said.

“Business should be aware that a fine print disclaimer is insufficient to correct or qualify a prominent representation on packaging or in advertising that is false or misleading.”

 

ACCC proposes to re-authorise infant formula marketing code

An agreement to re-authorise an agreement which prohibits the advertising of infant formulas directly to the public has been proposed by the Australian Competition and Consumer Commission.

Governing the interactions between manufacturers, importers and health care professionals, the self-regulatory code limits the marketing of infant formula for infants up to 12 months.

According to ACCC Commissioner Delia Rickard, “Breastfeeding of infants provides real health benefits to Australian society, and this industry agreement promotes and protects breastfeeding by restricting inappropriate advertising of infant formula.”

The MAIF Agreement gives effect in Australia to the principles of the World Health Organisation’s International Code of Marketing of Breast Milk Substitutes.

When the ACCC is satisfied, it may grant an authorisation to the public benefit when the conduct outweighs any public detriment. 

ACCC skewers Primo, KR Castlemaine & Otway Pork over labelling porkies

The Australian Competition and Consumer Commission (ACCC) has concluded investigations into alleged misleading conduct in the pork industry arising from ‘free range’, ‘bred free range’ and ‘bred outdoors’ labelling. 

The ACCC has accepted court enforceable undertakings from Primo Smallgoods, KR Castlemaine and Otway Pork as a result of these investigations.

“It is important that the description on product packaging and in promotional material accurately reflects the living conditions of the animals raised for the production of meat products,” ACCC Chairman Rod Sims said.

“When claims such as “free range” or “bred free range” are misused, consumers may be misled into paying more for a product feature that doesn’t exist,” Mr. Sims said.

In each of these three cases, the ACCC considered that the reference to either ‘free range’ (used by Primo Small goods) or ‘bred free range’ (used by Otway Pork and KR Castlemaine) in the promotion and labelling of the pork products was likely to give consumers the overall impression that the pigs were farmed according to free range methods. “

“These methods include that, at a minimum, pigs are able to move about freely in an outdoor paddock on most ordinary days. In fact, this was not the case.”

“In all cases, the producers have committed not to use the same descriptions unless their farming practices are such that, at a minimum, the pigs are able to move about freely in an outdoor paddock on most ordinary days. They have also agreed to implement consumer law compliance programs and publish corrective notices,” Mr Sims said.

 

Coles refunds over $12 million to suppliers following ACCC action

Independent arbiter, Jeff Kennett has instructed Coles to refund over $12 million to suppliers and has also allowed suppliers to exit the ARC program without penalty or have their ARC contribution rebates reviewed.

The $12 million is in addition to the penalty ordered by the court of $10 million fine in December last year.

“The arbitration process conducted by Mr Kennett has proven both extremely timely and effective with significant benefits to suppliers,” ACCC Chairman Rod Sims said.

“The process will also deliver flow on effects for suppliers more broadly as a result of changes Mr Kennett says Coles has begun to implement that affect the way it deals with its suppliers.”

The refunds process arose out of the resolution of two proceedings commenced by the ACCC against Coles in 2014: the ‘ARC proceedings’, and the ‘claims proceedings’.  In December, the Federal Court made declarations in both proceedings by consent that Coles had engaged in unconscionable conduct in 2011 in its dealings with certain suppliers.

As part of the resolution, Coles also provided a court enforceable undertaking to the ACCC to establish a formal process to provide options for redress for over 200 suppliers. In December 2014, Mr Kennett was appointed to administer the process and to assess the eligibility of:

  • over 200 smaller suppliers listed in the ARC proceedings, categorised by Coles as ‘Tier 3’ Suppliers, to obtain refunds of any prior ARC rebate payments and seek adjustments of future rebates (taking into account the circumstances of their entry into the ARC program and any benefit received from their access to ARC over and above any arrangements they had with Coles prior to the implementation of the ARC program); and
  • suppliers referred to in the claims proceedings (in respect of which Coles made admissions in relation to profit gap claims, waste claims, and delivery fines) to obtain possible payments.

“The high level feedback from suppliers is that they are largely satisfied with access to redress from Coles and the timely, efficient and low cost approach. Ultimately, it was a matter for each supplier to decide whether or not to proceed with the resolution proposed, and as Mr Kennett’s report demonstrates, a very large number accepted the relief offered by Coles,” Sims said.

“The arbitration process was intended to provide an efficient alternative to otherwise lengthy and costly processes in determining the loss and damage of affected suppliers.  Mr Kennett has now finalised his deliberations and has instructed Coles to refund over $12 million to a number of ‘Tier 3’ suppliers and a further $324,000 to suppliers listed in the claims proceedings. This is in addition to the penalty ordered by the court of $10 million,” Sims said.

Under the arbitration process, it was also open to suppliers to simply exit the ARC program. A number of suppliers took this option. Suppliers who sought a review of their eligibility for refunds also had the option to exit the ARC program.

“Mr Kennett has reported that his arbitration process has resulted in substantial ongoing savings for suppliers. Exit from the program chosen by some suppliers and reduced rates for others will save suppliers significant additional costs into the future,” Sims said.

Kennett’s determinations, as the independent arbiter, are binding on Coles and Coles has already moved to implement steps necessary to comply with those determinations. Kennett also made a number of non-binding recommendations to Coles on the basis of his discussions with some suppliers.

“The ACCC recognises and acknowledges Coles’ co-operation in acting upon the binding determinations made by Mr Kennett and in making some of the non-binding changes recommended by Mr Kennett. It moved quickly and without challenge to accept the decisions and implement changes,” Sims said.

 

Grocery Code prompts a new kind of supermarket war

ALDI has become the first to sign the Grocery Code, less than a week after Woolworths claimed it would be the first to put pen to paper.

ALDI says it will transition existing suppliers to the new terms of the Grocery Code by 3 August 2015 and new suppliers will agree to the new terms from 15 June 2015.

A spokesperson from Woolworths says the supermarket “has recently written to both Minister Billson and ACCC Chair Rod Simms indicating that, assuming the Code clears the Senate, we will sign the Code on July 1.”

According to the Grocery Code, after a wholesaler signs the Code, it has 18 months to offer its suppliers in writing to vary their agreement so that it conforms to the requirements of the Code.

If the supplier concerned accepts the offer, the wholesaler then has six months to vary the agreement.

So ALDI’s suppliers will see the changes by 3 August at the latest, the Code allows Woolworths up to two years to vary its supplier’s agreements.

In today’s announcement, an ALDI spokesperson said “We have always supported the concept of a strong and sustainable Australian grocery industry for retailers and suppliers. ALDI’s commitment to opt in to and implement the Code before any other major supermarket is testament to our business values and dedication to quality supplier relationships.”

ALDI said the spirit of the Code reflects its current practice with suppliers: forging long term, sustainable relationships and working in partnership to provide Australian shoppers with high-quality products at permanently low prices.

The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings.

Currently, The Code has been tabled in Parliament as a regulation under the Competition and Consumer Act 2010.

 

ACCC fines Griffith manufacturer for false claims

Supabarn Supermarkets and the Real Juice Company will each pay a $20,400 fine for claims made about a private label juice range.

The fines follow the issue of two infringement notices to each company by the ACCC in relation to representations made about the apple juice and cranberry juice products from the private label range of juices manufactured by juice manufacturer, The Real Juice Company and sold by a supermarket operator, Supabarn.

The ACCC found the labelling on the apple juice product to be false or misleading representation as it claimed the product was made from fresh apples grown in Australia, despite being made from reconstituted apple juice concentrate imported from China.

The labelling claimed:

  • “It’s produced locally using the freshest quality Apples”
  • “Straight From a Farm”
  • “Made in Griffith”

The cranberry juice product claimed the product did not contain added sugar or any other additives, but the product contained added sugar and other additives.

The cranberry juice labelling said:

  • “No added sugar; No artificial flavours; No artificial colours; No preservatives”
  • “So if you like your juice fresh with nothing else added”
  • “It’s really just fruit juice!”

The ACCC issued the two infringement notices because it had reasonable grounds to believe that Supabarn and The Real Juice Company had made false or misleading representations, in contravention of the Australian Consumer Law.

 “Truth in advertising is a priority area for the ACCC. Consumers should be able to make informed purchasing decisions and not be misled regarding the composition of products,” ACCC Chairman Rod Sims said.

“The claims we say were made versus the reality in this situation are very concerning, particularly given recent controversy over the source of some food products. In addition, false or misleading claims of this kind not only mislead consumers, but can also disadvantage competing suppliers in the market, especially those who are using Australian grown fruit.”

“Both manufacturers and retailers can be responsible for representations made on packaging or labelling of the products they supply, and each level in the supply chain 

should have systems in place to ensure that their products are compliant with the Australian Consumer Law,” Sims said.

The Real Juice Company is an Australian owned and operated manufacturer of juice products located in Griffith, New South Wales. Supabarn owns and operates four supermarkets in Canberra and five in Sydney.

From at least January 2014 to March 2015, The Real Juice Company manufactured and supplied nine flavoured juices to Supabarn under a private label contract. Both companies ceased supplying these juice products after becoming aware of the ACCC’s concerns.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australia Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

 

Coles to pay $2.5 mill for bread claims

The Federal Court has ordered Coles to pay penalties of $2.5 million for its misleading "Baked Today" and "Freshly Baked In-Store" bread promotion.

The Federal Court has ordered Coles Supermarkets Australia Pty Ltd (Coles) to pay penalties of $2.5 million for making false or misleading representations and engaging in misleading conduct in relation to the promotion of its par baked bread products, in proceedings brought by the Australian Competition and Consumer Commission.

The products were promoted as “Baked Today, Sold Today” and in some cases “Freshly Baked In-Store”, when they were in fact partially baked and frozen off site by a supplier, transported and ‘finished’ at in-store bakeries within Coles supermarkets.

In imposing these penalties, Chief Justice Allsop said “The contravening conduct in this case is substantial and serious. Notwithstanding the absence of any specific evidence as to loss or damage by a consumer or a competitor, it is clear that the significant potential to mislead or deceive and thus to damage competitors, the duration of the conduct, and the fact that the goods in relation to which the impugned phrases were used were “consumer staples” indicate that the objective seriousness of the offending conduct was considerable.”

The evidence before the Court showed that Coles had engaged in the campaign with the clear purpose of improving its market share vis-à-vis its competitors, being bakeries such as Bakers Delight…It set out to do so by engaging in the conduct that, in fact, breached the Australian Consumer Law,” Allsop said.

“This penalty sends a strong message to companies that they should not use broad phrases in promotions that are deliberately chosen to sell products to consumers but which are likely to mislead consumers,” ACCC Chairman Rod Sims said.

“As the Chief Justice pointed out, it is important that sellers in the market recognise that consumers are entitled to reliable, truthful and accurate information”

“The ACCC took this action because it was concerned that Coles’ “Baked Today, Sold Today” and “Freshly Baked In-Store” claims about its par baked bread were likely to mislead consumers. The conduct also placed independently-owned and franchised bakeries that entirely bake bread from scratch each day at a competitive disadvantage,” Sims said.

Coles’ conduct was part of a nationwide campaign that was promoted in 637 Coles supermarkets. “Baked Today, Sold Today” was used extensively on packaging for par baked products over a three year period. During this time, Coles sold a significant number of par baked products and generated substantial revenue from these sales.

In September 2014, the Court declared that by using the phrase “Baked Today, Sold Today”, Coles represented to customers that certain bread products were entirely baked on the day on which they were offered for sale, when this was not the case, in contravention of the Australian Consumer Law (ACL).

The Court also declared that by using the phrases “Freshly Baked In-Store”, “Freshly Baked” and “Baked Fresh”, Coles had represented that certain bread products were baked from fresh dough, entirely baked on the day on which they were offered for sale and had been entirely baked in the Coles in-store bakery, when this was not the case and in contravention of the ACL.

At that time, the Court banned Coles from advertising that its bread was made, or baked on the day that it’s sold for three years and that it place a corrective notice on its website and in its in-store bakeries.

 

ACCC acts on Chinese made “Aussie Beer”

The Independent Liquor Group (ILG) has paid a penalty of $10,200 following the issue of an infringement notice by the Australian Competition and Consumer Commission in relation to its “Aussie Beer” product.

From March 2014 to August 2014, ILG supplied a product named “Aussie Beer”, with labelling that incorporated the statement “100% owned” within a map of Australia and the statement “Australia’s finest malt”.  The packaging also featured green and gold colours, which are colours closely associated with Australian sporting teams.

The ACCC considered that, by its packaging and labelling, ILG represented that its “Aussie Beer” product was a product made in Australia when in fact the product was made in China.

The infringement notice was issued because the ACCC had reasonable grounds to believe that ILG had made false or misleading representations about the country of origin of the “Aussie Beer” product, in contravention of the Australian Consumer Law (ACL).

“Country of origin representations, particularly those designed to grab the eye of the consumer by using well known symbols, colours, or slogans, must be truthful,” ACCC Chairman Rod Sims said.

“Consumers will often place a premium on the provenance of a product, but are unable to check the accuracy of those claims.  This is particularly the case with Australian made products which encourage consumers to support local industries. Consumers are entitled to expect that prominent representations made on packaging are accurate without having to check for disclosures in the fine print.”

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protections of the ACL.

 

Food-related deaths and outbreaks no longer reported to ACCC

Food-related deaths and disease outbreaks will no longer have to be reported to the consumer watchdog by product makers and sellers under new federal laws.

Small Business Minister Bruce Billson pushed a bill on Wednesday to remove the need for food businesses to alert the Australian Competition and Consumer Commission when they become aware of safety problems, The Sydney Morning Herald reports.

He said state and territory laws required hospitals and doctors to report food-linked illness and death, and that this was enough.

"In addition to these requirements, the [law] requires all participants in the supply chain for a product to report to the ACCC any incident associated with a death, serious injury or illness within two days of becoming aware of any incident," he said.

"Both the ACCC and Australian food safety regulators consider these reports to be of no added value in regulating the safety of food products. The food industry has informed the Government that this requirement places a disproportionate cost on industry."

The Australian Food and Grocery Council welcomed the cutting of red tape, saying the "outdated" rules did nothing to improve food safety. Instead, it had created overlap and complexity for manufacturers, wholesalers and retailers.

"Mandatory reporting arrangements to the ACCC does not prevent harm, but has generated thousands of false alarms that have resulted in not one actual product recall," said Gary Dawson, chief executive of the AFGC.

"One per cent of food-borne illness is caused by packaged food. This reform effectively removes over-reporting of allegations that on investigation have no basis."

A NSW Food Authority spokeswoman said public health and safety were not being compromised by the federal government.

"The removal of this requirement does not impact on the NSW Food Authority's operations," she said. "Consumers can continue to have confidence and certainty in the authority's ability to mitigate food safety risks."

An Australian Competition and Consumer Commission spokesman told The Sydney Morning Herald he could not provide comment until the laws were passed, referring all inquiries to Mr Billson's office.

 

Food and Grocery Industry Code of Conduct legally enforceable

Aldi and Metcash are both on board for the new legally enforceable code developed by Coles, Woolworths and the Australian Food and Grocery Council.

On Tuesday 3 March 2015 the Food and Grocery Industry Code of Conduct (the Code) was declared to be a legally enforceable, voluntary prescribed code under the Competition and Consumer Act.

“Signing onto the Code will be a mark of the retailers commitment to fair dealing and to improving the operation of one of the most dynamic and competitive sectors of the economy – the fast moving consumer goods sector,” said AFGC CEO Gary Dawson.

The Code aims to deliver more contractual certainty in trading relations between suppliers and supermarkets and encourage the better sharing of risk and reduce inappropriate use of market power across the value chain.

It sets out clear obligations to ensure key elements of Grocery Supply Agreements are discussed and agreed up front.

The Code does not seek to impose overly restrictive rules on commercial negotiations, but rather provides commercial flexibility within a set framework of requirements and controls on behaviour.

Key aspects of the Code:

  • The requirement for retailers and wholesalers to act in good faith
  • The requirements of agreements between retailers or wholesalers and suppliers, including that they be in writing
  • Tough restrictions on retrospective and unilateral variations to grocery supply agreements and the requirement for any variation and the reason to be in writing,
  • Greater transparency on the basis of shelf allocation for branded and private label products;
  • Recognition of the importance of intellectual property rights and confidentiality in driving innovation and investment in new products; and
  • A low cost and fast track dispute resolution mechanism.

The Code was tabled in Parliament earlier this week.

The ACCC will regulate the Food and Grocery Code of Conduct.