s33 - Australian Consumer Law

33   Misleading conduct as to the nature etc. of goods

                   A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.

Note:          A pecuniary penalty may be imposed for a contravention of this section.

s29 - Australian Consumer Law

29   False or misleading representations about goods or services

             (1)  A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

                     (a)  make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or

                     (b)  make a false or misleading representation that services are of a particular standard, quality, value or grade; or

                     (c)  make a false or misleading representation that goods are new; or

                     (d)  make a false or misleading representation that a particular person has agreed to acquire goods or services; or

                     (e)  make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or

                      (f)  make a false or misleading representation concerning:

                              (i)  a testimonial by any person; or

                             (ii)  a representation that purports to be such a testimonial;

                            relating to goods or services; or

                     (g)  make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

                     (h)  make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or

                      (i)  make a false or misleading representation with respect to the price of goods or services; or

                      (j)  make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or

                     (k)  make a false or misleading representation concerning the place of origin of goods; or

                      (l)  make a false or misleading representation concerning the need for any goods or services; or

                    (m)  make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or

                     (n)  make a false or misleading representation concerning a requirement to pay for a contractual right that:

                              (i)  is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); and

                             (ii)  a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).

Note 1:       A pecuniary penalty may be imposed for a contravention of this subsection.

Note 2:       For rules relating to representations as to the country of origin of goods, see Part 5-3.

             (2)  For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.

             (3)  To avoid doubt, subsection (2) does not:

                     (a)  have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or

                     (b)  have the effect of placing on any person an onus of proving that the representation is not misleading.

s18 - Australian Consumer Law

18   Misleading or deceptive conduct

             (1)  A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

             (2)  Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).

Note:          For rules relating to representations as to the country of origin of goods, see Part 5-3.

Free-Roaming Chickens

When it comes to chickens, just what does the phrase 'free to roam' mean?

That is the question that has been put before the Federal Court after an action against La Ionica and Steggles chicken farms. The two companies advertised in various forms and locations that their chickens were 'free to roam' - this claim, the ACCC argued, was misleading and deceptive (breaching s18, s29 and s33 of the Australian Consumer Law)

In cases such as this, where a company is accused of being misleading or deceptive, it is important to remember that it is not necessarily the factual truth behind these statements that determines whether or not there is a breach. What does matter is the impression that a reasonable consumer would get, taking into account the context in which the statement is made. 

The central question in this case was, therefore, what would a reasonable person assume was meant by the 'free to roam'? 

Turi Foods (aka La Ionica), conceded that the claim was likely to mislead or deceive consumers and that the chickens at their barns were not in fact 'free to roam' to the extent that a standard consumer would expect. They had made the claim on two posters displayed in stores and on signage on delivery trucks. Tracey J in the Federal Court ordered a fine of $100,000, a 3 year injunction on the 'free to roam' claim, a corrective notice be published in a major daily newspaper and that the organisation institute training for staff on the consumer laws. 

Baiada and Bartter, who both sell chickens under the brand Steggles, decided to fight the allegations by the ACCC - leading to a trial in front of Tracey J. This trial considered the definition of 'free to roam', and visited the barns were chickens were kept - even taking the unusual step of painting a chicken to see how far it did indeed roam - to form a judgement. 

The court has concluded that the conditions were such that the term 'free to roam' was misleading, and punishment will be set at a later date.

The final element of interest in this case was whether the Australian Chicken Meat Federation could make use of the 'Media Safe Harbour' defence, which prevents media from breaching the act if they make factual errors. The judge ruled that the AMCF, which made the free to roam claim on its website, had breached the act and was not entitled to the 'Media Safe Harbour' defence because they existed to promote the interests of the chicken farms. 

Click here to view the La Ionica judgement
Click here to view the Steggles judgement

Organic Water?

The ACCC has today negotiated with seven different suppliers of bottled water to remove the term organic from their product labels. 

The commission approached the water sellers after deeming that water could not possibly be organic:

"The word ‘organic’ in the context of food and drink refers to agricultural products which have been farmed according to certain practices. Water is not an agricultural product, and cannot benefit from such practices so it is not appropriate to use ‘organic’ to describe it."

They also found it likely that having the term organic on the product was likely to lead consumers into a false belief that organic water is somehow superior to regular water (or tap water... but that's another matter).

Although the companies argued that 'Organic' was part of a brand name - rather than a claim about quality - The ACCC disagreed.

The Deputy Chair of the ACCC, Delia Rickard, spoke of what the commission term "credence claims", essentially, words which attempt to give a product some premium status. These Credence Claims, particularly in the food and beverage industries, are a priority for the ACCC according to February's Compliance and Enforcement Policy. Recent cases have seen the commission take on Steggles' Free-To-Roam chickens and Coles' "freshly-baked" bread.

However, it is a credit to both the commission and the companies involved that - unlike Coles and Steggles - we the taxpayer were spared the expense of a long and nonsensical trial concerning the organic qualities of water.

Click here to read the ACCC Press Release
Click here to read the article from Megan Levy (Fairfax)