Lessons for Advertisers

29 June 2007 - Cairns Slane News Winter 2007

The Ribena case and the 'Made in NZ' case –lessons for advertisers

GlaxoSmithKline (GSK) has been in the news recently for all the wrong reasons.  GSK pleaded guilty to 15 charges under the Fair Trading Act 1986 and was fined $227,500 and ordered to undertake a nationwide campaign of corrective advertising for misleading its customers about the vitamin C content of some of its Ribena products.

Five of the charges related to claims that ready-to-drink Ribena contained 7mg of vitamin C per 100ml.  Testing found no vitamin C in the ready-to-drink product.  Ten charges related to claims in TV adverts that "the blackcurrants in Ribena have four times the vitamin C of oranges". GSK accepted that this statement was liable to mislead consumers.

Not long after the Ribena case was the ruling against Sports Resources Limited (SRL).  SRL was fined $23,750 after pleading guilty to two charges of breaching the Fair Trading Act 1986.  SRL had instructed its staff to cut off the words "Made in China" and sew in new "Made in New Zealand" labels onto New Zealand's 2006 Commonwealth Games uniforms.  The clothing was actually made in China.  The Commerce Commission investigators found the floor littered with "Made in China" labels when they searched SRL's premises after receiving an anonymous tip off.

These cases highlight the importance of companies ensuring that claims made in advertising and on packaging are accurate and not misleading.  As the Commerce Commission stated in its Ribena ruling, companies should be monitoring the quality of the products they are selling, and if they find or suspect their product is not meeting the claims made, they must act immediately to correct the problem and inform consumers. 

A properly implemented Fair Trading Act compliance programme will not only assist in preventing breaches under the Act but can also mitigate when unintentional breaches occur.

Call us if you would like to discuss your obligations under the Fair Trading Act or to consider implementing a compliance programme.