Juice Company Guilty of Breaching Fair Trading Act

Media Release
Issued 12 November 2009/no 048

Juice company pleads guilty to breaching Fair Trading Act

Brownlie Brothers Limited trading as Simply Squeezed, a juice manufacturing and distribution company pleaded guilty to six charges of breaching the Fair Trading Act and was fined $45,000 in the District Court in Auckland today. An order for court costs and solicitors fees of $6,780 was also made by the Court in respect of the charges.

All six charges related to a television advertising campaign that ran from March to May 2008 for Simply Squeezed Chilled Orange Juice. The advertising campaign gave the impression that the product was predominantly made from New Zealand squeezed orange juice.

A television advertisement used images of Cape Kidnappers and ripe oranges hanging from a tree combined with the voice over stating ‘Made in the Hawkes Bay’ and ‘Simply Squeezed – you couldn’t pick a tastier juice’ which gave the strong impression that the product was predominantly made from New Zealand squeezed orange juice. However, at the time of the campaign, just over 50 per cent of the product was from squeezed New Zealand juice and the remainder was imported reconstituted juice made from concentrate. The reconstituted juice included water extracted soluble orange solids (known as WESOS) and imported kinnow juice concentrate.

Although the advertisement included a statement ‘Using local and imported ingredients’, this was in white font and small print and on screen for approximately three seconds.

“Businesses need to take care when designing their marketing and advertising campaigns that the overall message is not misleading or deceptive. Any messages in ‘fine print’ must correspond with the general claims, be noticeable and be easily read,” said Graham Gill, Commerce Commission’s

Fair Trading Branch Manager, Auckland.

“It is important that consumers have accurate information to be able to make informed decisions about the products that they purchase. Many consumers prefer to buy products that are New Zealand in origin. Providing accurate information is also fairer on those competitors in the juice market who are already being clear about the nature and origin of their products,” said Mr Gill.

Mr Gill also noted that it was disappointing to see Brownlie Brothers before the courts again, as the company had previously been prosecuted for offending under the Fair Trading Act in 2004 for misleading product labelling and television advertising of the same product following an industry wide investigation targeted at dealing with a variety of misleading claims in the juice industry. In July 2009, the Commission also warned Brownlie Brothers that aspects of their labelling of the Simply Squeezed Chilled Orange Juice may breach the Fair Trading Act.

The Commission has developed a set of free resources to help businesses comply with the Fair Trading Act. These resources include a check sheet for marketing and advertising campaigns and can be downloaded from the Commission’s website www.comcom.govt.nz under Fair Trading/Developing a Fair Trading Act compliance programme

“The Commission is strongly advising businesses to use these free materials to help develop their own compliance programme,” said Mr Gill.

The Commission will continue to monitor claims made by the juice industry and will take appropriate action if it believes the Act is being contravened.

Background

The Fair Trading Act. Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.

Brownlie Brothers Limited trading as Simply Squeezed is a juice manufacturer and distributor. It produces a range of juices, nectars and smoothies under its brands Simply Squeezed, Allganics and Bay Harvest. On 25 August 2009 the Commerce Commission cleared Frucor Beverages Limited (Frucor) to acquire Simply Squeezed Holdings Ltd and/or Brownlie Brothers Ltd (Simply Squeezed).

At the time of advertising Simply Squeezed Chilled Orange Juice was made from the following ingredients:

Squeezed orange juice /46.7% /Local

Reconstituted orange juice* /41.5% /Imported

Orange not from concentrate (NFC) /5% /Imported

Mandarin juice /5% /Local

Liquid Sugar – 67% /1.8% /Imported

Ascorbic Acid USP 26-Vitamin C (KEG) /Less than 1% /Imported

Potassium Sorbate (G) /Less than 1% /Imported

*Of this reconstituted orange juice, 41% of it consisted of water extracted soluble

orange solids (WESOS) and 34% of it consisted of reconstituted mandarin juice

(Kinnow). See explanations of WESOS and Kinnow below.

ENDS

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