In a hearing in the Federal Court in Adelaide today, counsel for the Australian Competition and Consumer Commission, Tom Duggan, said the penalty imposed on Heinz had to be sufficient to act as a deterrent against similar conduct by the company and others operating in the food industry.
“If it’s not big enough in the end it simply doesn’t represent a sufficient deterrent,” Duggan told the court.
Heinz is opposed to the $10 million penalty but has not suggested an alternative figure, the court heard.
Duggan argued that the company’s conduct involved both “wilful blindness” and “recklessness”and said it was very serious because of the potential implications for the diet and oral health of young children.
In his judgment in March, Justice Richard White ruled that the prominent statements on the packaging, that the Little Kids Shredz snacks comprised 99 per cent fruit and vegetables together with the pictures of the fruit and vegetables, conjured up impressions of nutritiousness and health.
“I am satisfied that each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to the health of children aged one to three years was misleading,” he said.
The Shredz products were a dehydrated snack made from 99 per cent fruit, vegetable and chia seed ingredients and did not contain any preservatives, artificial colours or flavours.
They have not been sold in Australia since May 2016.
At the time Heinz said it was disappointed with the ruling but respected the court’s decision.
“Heinz is committed to providing high quality food products and to communicating clearly and transparently with consumers on its packaging,” it said in a statement.
The ACCC case centred on claims that Heinz made representations on its packaging that suggested the snack had the same nutritional value as fresh fruit, it was a nutritious food for young children and it would encourage healthy eating habits.
Expert witness for the ACCC, nutritionist Rosemary Stanton, told the court in July last year that such depictions were misleading as the product “is not good for toddlers”.
Heinz had argued none of those alleged representations had been made and, even if they were, they were not misleading.
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