Parent Category: Lightbulb
Category: Corporate & Business Dealings
Published on Friday, 30 March 2007 01:43
Written by Mike Clarke
As the dust settles over the recent “Ribena-gate” controversy and a growing number of unsold Ribena bottles, it is time to evaluate just how to avoid similar fates to the once trusted juice beverage brand.
Ribena-gate began with a blackcurrent juice drink named Ribena, some amazing claims by GlaxoSmithKline about the drink's Vitamin C content, and a couple of enquiring school girls who discovered through a school science lab project that Ribena products had little or no Vitamin C. They informed the manufacturer, GlaxoSmithKline. It took little notice.
It ended with GlaxoSmithKline copping a fine of A$201,000. For GlaxoSmithKline, that court-imposed penalty for its Vitamin C purple prose is most likely to be only the start of its woes with the brand damage yet to be fully realised.
This week, arising from action taken by the Competition Commision of New Zealand, GlaxoSmithKline pleaded guilty in the Auckland District Court that the Vitamin C claims were misleading under the Fair Trading Act 1986 (NZ). This all follows on from the work of the two schoolgirls. In Australia their penance is somewhat lighter, and includes GlaxoSmithKline placing notices (presumably such as this one on their website) in retail outlets advising consumers of the allegedly misleading information at the ACCC's request. Again, one would imagine this won’t exactly boost sales.
Such (black)current events serve to remind those in the food and drink industry of the perils of making false or misleading claims on product labels or in advertising and marketing materials. Clearly, the key message to be learned from Ribena’s folly is that any statements, claims, slogans, trademarks, testimonials, comparisons or any other device used on labels and in promotional materials must not be misleading or deceptive.
Beyond this general mantra, a few further specific compliance issues are:
- Just Be Yourself. A common way to land in hot water is to mislead or deceive consumers that your product is related to another company’s product or brand, through the use of similar colours, shapes, trade marks, logos and other devices. Often such similarity can be completely innocent but this alone won’t get you out of trouble. Not only will you invoke the wrath of the company you’re (deliberately or inadvertently) ripping off, you’re also falling foul of trade practices law. Make sure your products don’t infringe other people’s rights.
- Don't slightly exaggerate, unless you really mean it! Are claims or slogans simply “mere puff” (ie self-evident exaggeration such as “the best cake in the universe”) or actual representations about your product? To qualify as puffery the exaggeration should be self-evident. For example, saying your product is "bigger and better"(1) or "works like no other card"(2) has been categorised as representations and not mere puff – the makers of those claims had to literally stand by them. If you’re going to use over-the-top statements for advertising purposes, make sure they really are over-the-top and not able to be construed as genuine claims or representations.
- Don’t be a mad scientist. Do you make any scientific representations in advertising your product? The courts have stated that proof there is no scientific foundation for a statement in the realm of a science may be sufficient evidence that the statement is misleading.(3) Ribena is the case in point here. Once you are making an even remotely scientific claim, it’s time to visit the lab to make sure it won’t come back to haunt you.
- Compare carefully. If you use comparative advertising techniques, you bear a large responsibility that any comparisons to other products must be fair and truthful. You must walk a very fine line. In one case, a coffee company’s ad suggested that another brand of coffee was twice as more expensive, when really it was only 53% more expensive, rendering the assertion misleading.(4) If you must do it, then obtain specific legal advice on where the line is, and don’t cross it.
- What’s in a name? A lot. Are there geographical indicators on your products, eg Beechworth Gemstones? Are these geographical references accurate, or could they misleading (eg if the above gemstones are actually from another location)? Furthemore, do your products fall within specialised categories with specific laws relating to using geographical indicators (eg as regards wine regions)? If so, be doubly thorough clearing product names and descriptors.
- Make sure you’re up to standard. Are you aware of product standards specifically relevant to your products? For instance, if the product contains genetically modified foods, it must comply with both assessment regulations and labelling requirements under Standard 1.5.2 (Food Produced Using Gene Technology).
The effects of not keeping your own house in order can be disastrous. A colleague and shattered Ribena drinker probably summed it all up when he said that whilst he probably won’t abandon drinking Ribena altogether, it will definitely not be the “habit” it once was. To avoid a similar fate, you must immediately implement a comprehensive compliance program for your products or review existing measures to ensure they are adequate. Don’t put it off because you never know - some dedicated schoolgirls with curiosity and too much time on their hands might just end up bringing your entire brand down.
(1) Byers & Ors v. Dorotea P/L (1987) ATPR 40-760
(2) Budget Rent A Car System P/L v Dewhirst & Ors (1984) ATPR 40-485 [appeal dismissed (1986) ATPR 40-648]
(3) Janssen Pharmaceutical Pty Limited v Pfizer Pty Limited (1986) ATPR 40-654
(4) Stuart Alexander & Co. (Interstate) P/L & Anor. v. Blenders P/L (1981) ATPR 40-244
Related Dilanchian Materials