The conviction of Pacific Dunlop Holdings (NZ) Limited for making misleading claims about Plumrose Light Deli Ham sets a significant precedent for the food industry - a factually correct statement can still be misleading and breach the Fair Trading Act.
The Commerce Commission prosecuted Pacific Dunlop Holdings last year and the Christchurch District Court released its decision yesterday.
Commission Chairman Dr Alan Bollard said that the decision means that the overall impression given by the food label is the basis for deciding if it is misleading.
Dr Bollard said that the promotion of food products is an area on which the Commission is focusing, particularly on claims that a product is healthier than competitors' products.
"If the claims are misleading, then customers are duped into buying a product that does not provide the benefits claimed for it and competitors complying with the law are disadvantaged," he said.
In this case, the canned ham was labelled "90% fat free", "light deli ham" and "healthier eating with Plumrose".
Dr Bollard said that the Commission did not dispute that the ham was 10 percent fat. It argued that the overall impression created was that Plumrose deli ham was a lower fat product, when that was not the case.
Tests showed that the canned ham contained between twice as much and almost four times more fat than vacuum packaged ham.
"When read as a whole (including the slogan "healthier eating with Plumrose"), the overall impression which the labelling of the Plumrose deli ham could have conveyed to a prospective purchaser was that the product was comparable in flavour terms to fresh or packaged deli ham but contained less fat than those products," Judge Abbott said.
"As in my view the labelling of the Plumrose Deli Ham conveyed the overall impression that, in a comparative sense, it was a low fat product, that claim was both unjustified and misleading," he said.
A sentencing date has not yet been set.
The Commission laid a similar charge against Pacific Dunlop in relation to Plumrose Lean and Tasty Leg Ham, which was described as "95% fat free". Judge Abbott found that the labelling of the leg ham fell short of being misleading, although by a narrow margin.
