Heinz ordered to pay $2.25 million penalty over misleading health claim

24 August 2018

The Federal Court of Australia has ordered H.J. Heinz Company Australia Ltd (Heinz) to pay penalties totalling $2.25 million for making a misleading health claim that its Little Kids Shredz products were beneficial for young children.

In March 2018, the Federal Court found that Heinz had breached the Australian Consumer Law by claiming its Shredz products were beneficial to the health of children aged 1-3 years, when this was not the case.

The Court also found that Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to health of children was misleading.

The ACCC had sought a penalty of $10 million for Heinz.

“The Heinz Group is one of the largest food companies in the world. We will continue to advocate for stronger penalties to deter large companies from engaging in serious contraventions of Australia’s consumer laws, particularly now that Parliament has passed legislation substantially increasing the maximum penalties for breaches of the ACL,” ACCC Chair Rod Sims said.

“The ACCC wants to ensure that penalties for breaches of the consumer law are large enough to get the attention of the financial markets, boards and senior management."

The ACCC is carefully considering the judgment. 

The Court also ordered Heinz to establish a consumer law compliance program and to pay the ACCC’s costs.

Background:

The ACCC instituted proceedings against H.J. Heinz Company Australia Ltd (Heinz) in June 2016.

In March 2018, the Federal Court found that Heinz had breached the Australian Consumer Law. Heinz has filed a Notice of Appeal from this judgment.

Release number: 
MR165/18
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