Food giant Heinz has been fined $ 2.25 million for misleading the public by claiming that a range of toddler snacks was healthy when they contained more than 60 percent of sugar.
Earlier this year, the federal court ruled that Heinz deliberately misled the public about the nutritional value of its Little Kids Shredz range by claims on the packaging.
The legal action was launched by the Australian Competition and Consumer Commission (ACCC) following a complaint from the Coalition Obesity Policy (OPC) about products made from mainly fruit juice concentrates and pastes.
Justice Richard White instructed Heinz to pay $ 2.25 million to the British Commonwealth within 30 days for violating Australian consumer law and the legal fees of ACCC.
He also commissioned the food giant to set up a Consumer Compliance Consumer Protection Program within three months.
During the trial, the ACCC argued that the sticky snacks were higher in sugar than some pastry products, but they were brought on the market as being favorable for young children.
Justice White confirmed the ACCC's claim that the images on the boxes, including images of fruit and vegetables and the words "99 percent fruit and vegetables", incorrectly implied that the products were beneficial to toddlers.
"Heinz should have known that it made the representation of healthy foods with respect to each product and that that presentation was false or misleading," he said.
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Justice White said the products were not beneficial for children aged one to three years because of their high sugar content and sticky texture.
He felt that the company was engaged in "misleading or misleading" behavior that infringed Australian consumer law.
"Each of Heinz's nutritionists should have known that a statement that a product containing about two-thirds of sugars beneficial to the health of children aged one to three years was misleading," he said.
"Everyone should have known that consumption of a product with that sugar content can have the effects that are the basis of the [World Health Organisation] guidelines. "
In March, Heinz director Bruno Lino said the company was disappointed with the findings of the court.
At a hearing in August, ACCC Tom Duggan's lawyer said that Heinz's Australian branch would have to be fined $ 10 million, which describes the behavior of the food giant as reckless.
"The consumer is being distracted from other products that might be healthy," Duggan said.
"If [the penalty] is not big enough … in the end it simply does not mean enough deterrence, "he said.
Michael O & # 39; Brien for Heinz called for a fine of $ 400,000, which was the total gross profit of the Shredz series.
Sanctions must be greater: ACCC
ACCC president Rod Sims said the fine fell far below the $ 10 million fine that the watchdog called the court to impose.
"Heinz is one of the largest food companies in the world, we really think sanctions should be big enough so that the management and senior management notice them," he said.
Mr Sims said that changes in penalties for consumer infringements, regulated this week in Parliament, would increase the fines from $ 1.1 million per infringement to a maximum of 10% of sales.
"In Heinz's case, that could be up to a maximum of $ 43 million per infringement," he said.
"So it is 40 times higher than the maximum penalties used for this judgment."
He said that the new penalties are more in line with the seriousness of making misleading claims.
"[The new regime] is going to mean punishments that companies will really have to notice, so that this kind of behavior is effectively deterred in the future. "
Heinz director Bruno Lino said in a statement that the company has respects the decision that was made.
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