Cadbury Schweppes Proprietary Limited had breached the Trade Practices Act 1974 by inadequately conveying that two Cottee's cordial products did not contain the extracts of real fruit depicted pictorially on packaging, the Federal Court found on Friday.
In February 2002 the Australian Competition and Consumer Commission instituted legal proceedings against Cadbury Schweppes, the manufacturer of Cottee's cordial products, alleging false, misleading and deceptive conduct in its labelling of Cottee's banana mango flavoured cordial and apple kiwi flavoured cordial concentrate.
The labelling on the banana mango flavoured cordial used the words 'banana mango' in large print, pictures of bananas and mangoes and a 'Go Bananas' motif. The Federal Court found the labelling would convey to some reasonable potential purchasers the impression of real bananas and real mangoes.
In his judgment, Justice Gray observed "the most important element in conveying that impression is the pictorial representation of bananas and mangoes".
The labelling on the apple kiwi flavoured cordial concentrate used the words 'apple kiwi' in the name of the product and pictures of cut kiwi fruit. Justice Gray found this labelling would convey to some reasonable potential purchasers the impression of some extract of real kiwi fruit.
He rejected Cadbury Schweppes's contention that the use of the phrase 'flavoured cordial' was sufficient to overcome any effect the depiction of real fruit might have.
On the basis of the overall impression of the packaging and labelling of each of the two products Justice Gray found "each was capable of conveying to a significant body of reasonable consumers a representation that the product concerned contained extracts of the real fruit depicted".
He found: “In each case it is likely that some reasonable consumers would be misled or deceived by the representation and influenced by it to purchase the product concerned on the basis that it contained the real fruit represented".
Accordingly, he found the ACCC had established that Cadbury Schweppes had engaged in conduct that was likely to mislead or deceive and had made false representations in contravention of the Act in respect of each product.
ACCC Chairman, Mr Graeme Samuel, welcomed the decision saying it reflected the importance of the overall impression of labelling in conveying to consumers the content of products.
"Truth in labelling is an essential requirement, especially for food products", Mr Samuel said. "Food manufacturers and importers should ensure consumers are sufficiently informed as to the ingredients and nature of food products they market".
Noting that Cadbury Schweppes no longer manufactures or supplies the banana mango flavoured cordial and have relabelled the apple kiwi flavoured cordial concentrate, Justice Gray declined to make injunctions restraining future labelling sought by the ACCC.
Cadbury Schweppes was ordered to pay 70 per cent of the ACCC's costs.