Court orders fines of $400k for false ‘free range’ claims

Two separate judgements handed down by the Federal Court demonstrate how seriously the court takes false ‘free to roam’ claims.

The Federal Court has ordered Baiada Poultry Pty Ltd and Bartter Enterprises Pty Ltd, the processors and suppliers of Steggles branded chicken products, to pay a total of $400,000 in civil pecuniary penalties.

The Court found that Baiada and Bartter had engaged in “false, misleading and deceptive conduct (or conduct liable to mislead and deceive)” by describing the living conditions of its chickens, as “free to roam in large barns”.

In reality, the Court found that for the initial 42 days (of an average 56 day growth cycle) the chickens were kept in stocking densities which did not allow for “a largely uninhibited ability to move around at will in an aimless manner”.

The Australian Competition and Consumer Commission (ACCC), which instituted proceedings against Baiada and Bartter in 2011, regularly investigates credence claims.

“Credence claims, which represent that a product possesses a premium attribute, are a priority area for the ACCC; particularly those in the food and beverage industry with the potential to influence consumers and disadvantage competitors,” ACCC Chairman Rod Sims said.

“Consumers are increasingly making purchasing decisions that value the types of claims that directly affect the integrity of the product, such as where or how something was made, grown or produced,” Sims said.

The significant fine coincides with a separate Federal Court decision relating to a duck meat supplier, and its own misleading credence claims.

In a claim brought by the ACCC, Luv-a-Duck was found to have contravened Australian Consumer Law (and former Trade Practices Act) and ordered to pay $360,000 in civil pecuniary penalties, as well as $15,000 towards the ACCC’s costs.

The Court found that on its packaging, website, brochures and in a promotion for the Good Food & Wine Show in Adelaide in 2012, Luv-a-Duck had claimed its ducks were:

  •  ‘grown and grain fed in the spacious Victorian Wimmera Wheatlands’; and/or
  • ‘range reared and grain fed’ (which mainly appeared as a logo).

The ACCC argued that these descriptions represented Luv-a-Duck’s duck meat products were or would be processed from ducks that:

  • spent at least a substantial amount of their time outdoors;
  • were raised in a spacious outdoor environment; and
  • were of a different quality than duck meat products processed from barn-raised ducks, when this was not the case.

The Court found that the duck meat products offered for sale and sold by Luv-a-Duck were in fact processed from ducks that did not spend any of their time outside of their barn.

As a result, the representations unfairly gave the company a competitive advantage in the industry.

“This penalty is a further warning to the poultry industry and businesses generally that consumers are entitled to trust that what is said on product packaging and other promotional product material is true and accurate,” ACCC Commissioner Sarah Court said.

“Traders who abuse the trust of Australian consumers may also find themselves exposed to similar enforcement action,” she added.

In addition to the penalties and costs, the Court also made consent orders:

  • restraining Luv-a-Duck for a period of three years from using the phrases ‘grown and grain fed in the spacious Victorian Wimmera Wheatlands’ and ‘ranged reared and grain fed’ or modifications of those words when its ducks are not raised in such conditions;
  • requiring Luv-a-Duck to publish corrective notices on its website and business premises and send a corrective notice to its customers; and
  • requiring Luv-a-Duck to implement and maintain a trade practices compliance program for three years.

Luv-a-Duck has a market share of 40 per cent of duck meat products in Australia, selling some 80,000 ducks nationwide per week.

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