In the fourth case of its kind over the last year, an Auckland businessman has admitted making claims that were likely to mislead consumers as to the country of origin and potency of royal jelly products.

Mr Sung Yub Paik was fined $12,750 in the Auckland District Court after admitting two charges of breaching the Fair Trading Act following a Commerce Commission investigation.

As Managing Director of Healthyways Products Corporation Limited, trading as Pacom, Mr Paik was responsible for the marketing and distribution of Healthyways Natural Products Royal Jelly capsules through its Auckland store.

Despite the royal jelly being sourced from China, the labels and packaging included the wording 'Made in New Zealand' and featured an iconic New Zealand fern symbol. Wording on the label also indicated that the royal jelly was fresh, when it was provided in powdered form.

In addition, the product was represented as containing 6 - 6.3 per cent of the active ingredient 10HDA. ESR testing revealed it only contained 4.32 per cent 10HDA.

In sentencing, Judge Davis said there could be no doubt that each of Healthyways' customers and competitors were disadvantaged by the representations.

Greg Allan, Commerce Commission Enforcement Manager, Wellington, said that this was another case where consumers had been deliberately misled by a business trying to exploit the premium New Zealand royal jelly market.

The case also demonstrated that company directors will be held individually accountable for their actions.

"Mr Paik was personally responsible for the design and wording of the labels and was aware that the 10HDA levels represented on the labels was inaccurate," said Mr Allan.

Mr Allan said the Commission's wider investigations into the royal jelly market in Auckland had uncovered a concerning lack of understanding of New Zealand consumer law by traders.

 

"We hope the actions we have taken over the last year have sent a strong message that this type of behaviour is not tolerated, and the consequences can be severe."

Background

Royal Jelly is a key active ingredient used in dietary supplements. It comes from the honey bee secretion that is used in the nutrition of larvae.10-Hydroxy-2-Decenoic Acid (10HDA) is a substance which exists only in royal jelly. 10HDA is a fatty acid which is involved in growth and immunity. 10HDA is an important factor in assuring quality and potency. New Zealand royal jelly is believed to be of a high quality, with readings of 10HDA higher than found in royal jelly from other countries. In New Zealand royal jelly products made from imported ingredients make up approximately 95 per cent of the market. Genuine New Zealand royal jelly products are sold at a premium price.

Related cases. On 4 May 2010 New Zealand Natural Care Products Limited pleaded guilty to two charges of breaching the Fair Trading Act related to making false or misleading representations concerning the country of origin of royal jelly products. The company was fined $15,000 in the Auckland District Court.

On 28 May 2010 Shim's International Limited, trading as Royal Deer of New Zealand, was convicted on two charges of breaching the Fair Trading Act in relation to claims made about its product Health Plus Royal Jelly Extract. The company was fined $6,000.

On 29 September 2010, NZ Korea Health Limited admitted labelling imported royal jelly as New Zealand made, and as being of high potency when it was neither, was fined $16,000. Mr Sang Rae Kim, also known as Jonathan Ken, pleaded guilty to two charges and was fined $12,000.