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Friday 20 May 2022

Health food firm hit with $377k fine

5th August 2021 By Staff Reporter | | @foodtickernz

A Christchurch health food manufacturer has been slapped with a $377,000 fine after it wrongly presented products as containing 100% New Zealand ingredients.

New Zealand Health Food’s royal jelly supplements.

New Zealand Health Food Company received the fine after it pleaded guilty to engaging in conduct that was liable to mislead the public about the origin of ingredients in its royal jelly supplements.

A Commerce Commission investigation found the company made claims such as “100% New Zealand” and used images on packaging such as the silhouette of the Kiwi and map of New Zealand, as well as mountain and pasture imagery on the products, from December 2015 to December 2020.

It did so despite knowing the key ingredient in the products came from China – an act which Christchurch District Court Judge David Ruth said “was at best careless and at worst done deliberately”.

The various representations were made on product labelling, the company’s websites, social media, and through other marketing channels such as email newsletters over the five year period.

Other phrases employed were ‘our product range is a selection of some of the finest bee products that New Zealand’s wild and rugged landscapes have to offer’, and ‘the New Zealand Health Food Company is dedicated to bringing you premium quality products which have been sourced from the pristine environment that is synonymous with New Zealand’.

The products were sold under three different brands – New Zealand Health Food, Manuka South, and Kiwi Natural Health – both here and in export markets.

According to the investigation by the commission, which filed three representative charges, the royal jelly in the supplements came from China. Most of the other ingredients were sourced from overseas. The royal jelly was put into capsules and packaged in New Zealand.

“What the company knew at the start was that its royal jelly was from China,” Judge Ruth said.

“The customers must have been entitled to know the origin of the products they were buying and to not say where it came from was at best careless and at worst done deliberately due to the advantage that arose to the potential purchasers’ state of mind and advantage to be gained over the distributors who did abide by the rules.”

The Commerce Commission said NZHFC had previously been involved in its investigation and prosecution of Topline International for similar misleading country of origin claims, and had received a guidance letter that the commission sent to a number of traders outlining concerns about place of origin labelling on dietary supplements.

“These interactions, and particularly its cooperation with the earlier investigation, ought to have alerted the company to its own conduct being unlawful,” the commission said.

Commission chair Anna Rawlings said businesses need to consider the overall impression that consumers are likely to form from the phrases and images used in marketing, including brand names.

“Country of origin claims are very difficult for consumers to verify, so businesses must ensure packaging and marketing materials are clear and not misleading.” 

“It is very disappointing to continue seeing traders using association with New Zealand in a misleading way for commercial gain.”



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