Misleading consumers as to the health benefits of a product line aimed at young children has seen Heinz cop a multimillion-dollar penalty in court.
The food giant had attracted the eye of the Australian Competition and Consumer Commission (ACCC) in mid-2016 after marketing its Little Kids Shredz product range as being “99 per cent fruit and veg”, despite the products containing more than 60 per cent sugar – higher than natural sugar volumes.
In March, the Federal Court found Heinz guilty of using false or misleading claims to market to parents, although the penalties were to be determined at a later date.
This week, the court announced it would fine Heinz a total of $2.25 million.
While the multimillion price tag is staggering, it fell well short of the $10 million in penalties that had been sought by the ACCC, which is “carefully considering the judgement”.
“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, particularly now that Parliament has passed legislation substantially increasing the maximum penalties for breaches of the ACL,” said ACCC chair Rod Sims.
“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.”
At the time of the original verdict, Heinz managing director Bruno Lino had said the company “respects the decision that has been made”, and that it was “reviewing this matter carefully to see if there are any further learnings which can be applied going forward”.
Heinz declined to comment on the size of the penalties, and simply reissued its earlier statement from March.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.