Consumers protected from misleading rice claims

Consumers should no longer be misled about the country of origin of their preferred rice after Australian Competition and Consumer Commission action.

"By consent, the Federal Court in Sydney has found that Taj Food Sales Pty Limited and its managing director, Mr Sah Dev Varma, had made false representations about the country of origin of its basmati rice", ACCC Chairman, Professor Allan Fels, said today.

"The ACCC alleged that for the past four years Taj Food Sales had been importing basmati rice from Pakistan and packaging the rice in one-kilogram bags marked with the words 'Produce of India'.

"Some consumers believe Indian basmati rice to be superior to that grown in other countries and are prepared to seek it out and pay a premium.

"Taj Food Sales sold the packaged rice to Woolworths Limited for sale through its supermarkets. The rice was sold under the brand name Taj Premium Long Grain Pure Basmati Rice. Woolworths was unaware that the rice was from Pakistan.

"Taj Food Sales agreed before the court that in supplying rice falsely labelled as 'Produce of India', it engaged in conduct that was misleading or deceptive and in breach of sections 52 and 53(eb) of the Trade Practices Act 1974. This latter section specifically prohibits the making of misleading claims regarding the place of origin of goods.

"Taj Food Sales and Mr Varma agreed to injunctions to prevent them from engaging in the offending conduct in the future. Taj Food Sales will also publish corrective newspaper advertisements and notices advising affected consumers of their rights to a refund from the company.

"As country of origin is an important consideration for most consumers in choosing the products they purchase, the ACCC regards false claims of this type by manufacturers, importers, or even retailers, to be a serious breach of the Act. The ACCC will not hesitate to prosecute any company that seeks to mislead consumers by making false claims about the place of origin of the goods they sell. In particular, the ACCC is well aware that 'Produce of' claims are effectively premium claims under the law.

"The ACCC will not only investigate alleged false labelling regarding 'Made in Australia' or 'Produce of Australia' claims, but will take action even where there is no Australia-made aspect".

In taking action against Taj Food Sales the ACCC was conscious of the cultural sensitivities involved, Professor Fels said.

"Basmati rice is particularly favoured by consumers from a southern Asian background. Many seek Indian-grown basmati rice over similar strains grown elsewhere".

Professor Fels said that by taking action again in relation to the false country of origin labelling of imported foods the ACCC hopes this matter will be a firm warning to any business that may contemplate making false representations about the place of origin of the products they sell. Also the action against the managing director of Taj Food Sales shows that the ACCC will pursue those persons knowingly concerned in such contraventions.

The ACCC notes that the federal Department of Industry, Science and Resources recently embarked on a prominent press advertising campaign across Australia, under the heading "Fine. Or fine", in which the Department explained to business the requirements under the Act when making country of origin representations. The ACCC sees this campaign as effectively complementing its own strong stance against misleading country of origin claims by business and expects that its action against Taj Food Sales and its managing director will reinforce this stance.