Businesses often make claims about their products in an attempt to obtain a selling advantage. ‘Premium claims’ is a broad term used to describe a claim that gives the impression that a product, or one of its attributes, has some kind of added benefit when compared to similar products and services. These claims go beyond generic descriptions of products.
Claims may suggest a product is superior to others in its class (‘extra virgin olive oil’) or offers a nutritional benefit (‘no added colours or preservatives’). The premium claim may also promote a product as being of a perceived quality based on its country of origin (‘Swiss chocolate’, ‘Belgian beer’ or ‘German engineered’).
Businesses commonly use the word ‘free’ in making ‘premium claims’ (e.g. ‘free from additives’). The word ‘free’ is powerful and absolute. If the product does in fact contain the thing that it claims to be ‘free from’, the seller should consider a different claim that accurately describes the product. Food labelled as ‘lactose free’ should be 100 per cent free of lactose. For environmental-benefit claims, such as ‘100 per cent recyclable’, see Environmental and organic claims.
The Act is complemented by Standard 1.2.7 of the Australia New Zealand Food Standards Code which regulates what nutritional and health claims can be made about certain foods.
Real case study: A company paid two infringement notices totaling $13 200 for labeling products as 'extra virgin olive oil' that ACCC testing indicated were not of that kind.
Premium claims may influence consumers’ purchasing decisions if they give the impression that the products are a better choice than those without the claimed added benefit. As consumers are often unable to assess the accuracy of premium claims, you must ensure that the claims you make can be substantiated.