The Commerce Commission has concluded an investigation into the promotion and labelling of juice products by Brownlie Brothers Limited trading as Simply Squeezed, a juice manufacturing and distribution company.

As a result of the investigation the Commission will prosecute Brownlie Brothers Limited trading as Simply Squeezed for alleged contraventions of the Fair Trading Act in relation to a television advertising campaign that ran from March to May 2008 for its Simply Squeezed Chilled Orange Juice. As this matter will be before the courts, there will be no further comment on the prosecution.

The Commission has also issued a warning to Brownlie Brothers that it needs to provide clearer information about the nature, content and origin on the labels of its Simply Squeezed Chilled Orange Juice product in order to avoid contravening the Fair Trading Act.

The Commission has warned Brownlie Brothers that it was likely to have breached the Fair Trading Act by not disclosing on its Simply Squeezed Chilled Orange Juice labels and other Brownlie Brothers' juice products:

  • the use of water extracted soluble orange solids (WESOS) or 'pulp wash' as a separate component; and
  • the use of imported Kinnow juice concentrate.

In addition, the Commission has warned Brownlie Brothers for sending out a wholesale price list to the hospitality industry which described the Simply Squeezed juice products as '100% squeezed juice' when this was not the case. The price list was sent out in August 2008 and was taken out of distribution in January 2009 when it was discovered during the course of the Commission's investigation.

"Consumers often make purchasing choices based on first impressions gained from the names and labels of products," said Adrian Sparrow, Commerce Commission Director of Fair Trading.

"While the presence of New Zealand and imported squeezed orange juice, imported reconstituted orange juice, mandarin juice, sucrose (sugar), preservative and vitamin C in the Simply Squeezed Chilled Orange Juice product is disclosed on the back label, the front label only has the description 'chilled orange juice'. The lack of specific qualifying information on the front label combined with the brand name Simply Squeezed may lead some consumers to believe that the juice product is purely squeezed orange juice when this is not the case," said Mr Sparrow.

During the Commission's investigation, Brownlie Brothers confirmed to the Commission that the make up of the product changes throughout the course of the year due to the availability of local oranges and that on average across the year the Simply Squeezed Chilled Orange Juice product contains 40 per cent locally squeezed fruit juice. The other 60 per cent was made up of imported reconstituted fruit juice including a proportion of water extracted soluble orange solids also known as WESOS/pulp wash and imported single strength juice. It also contained imported Kinnow juice concentrate which was not disclosed on the label.

"To avoid contravening the Fair Trading Act we believe that Brownlie Brothers needs to be clear about the nature and origin of their juice products. If a company chooses to use pulp wash or WESOS in its juice products, the Commission believes that this must be separately and clearly disclosed in the list of ingredients. This will give consumers all the relevant information they need to make informed decisions about the juice products they purchase. Providing accurate information is also fairer on those competitors in the juice market who are already being clear about the nature and origin of their products," said Mr Sparrow.

The Commission has been advised by Brownlie Brothers that it will no longer be using WESOS in its products.

The Commission's warnings give Brownlie Brothers the opportunity to change its practices to ensure that it does not risk contravening the Fair Trading Act. The Commission will continue to monitor claims made by Brownlie Brothers and others in the juice industry and will take appropriate action if it believes the Act is being contravened.

Background

The Fair Trading Act. Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.

Brownlie Brothers Limited trading as Simply Squeezed is a juice manufacturer and distributor. It produces a range of juices, nectars and smoothies under its brands Simply Squeezed, Allganics and Bay Harvest. It also manufactures on contract supermarket house brands, including the SignatureRange for Progressive Enterprises Limited and Pams juices for Foodstuffs.

Previous investigations. In 2002 the Commerce Commission commenced an industry-wide investigation into claims made by the juice industry. The Commission's investigation found that nine products contained minor or technical breaches and were therefore be suitable for immediate resolution by way of warning or voluntary undertakings.

Voluntary undertakings to change labels/website were entered into with:

  • Charlies Trading Company (who were also warned in relation to labelling);
  • Frucor Beverages Limited;
  • Rio Beverages Limited;
  • Greenway orchards Limited;
  •  First Choice Limited;
  • Foodstuffs (New Zealand) Limited;
  • General Distributors Limited; and
  • Coca Cola Amatil (NZ) Limited.

A Commission settlement was entered into with Progressive Enterprises Limited.

Staff settlements were reached with:

  • Phoenix Organics Limited in December 2003 in relation to misleading labelling over the organic nature of the product in; and
  • Good Hope International Pty Limited in September 2004 in relation to misleading labelling of its Dewlands juice range being represented as 100 per cent pure juice when that was not the case.

Freshly Squeezed Limited was convicted and fined $10,000 in December 2003 for breaches of Section 10 and 13(j) in relation to its Arano and Fresh Selection juice products. The labelling of the Arano juice had a stylized kiwi logo on the front of the label. This, along with the name Freshly Squeezed Limited with a Kumeu address and other representations suggesting that the product was 100 per cent freshly squeezed orange juice when that was not the case.

Brownlie Brothers Limited trading as Simply Squeezed was previously prosecuted by the Commission in 2004 for breaching the Fair Trading Act in relation to misrepresenting the nature, content and origin of its juice product in television and juice labels. It was fined $35,000.

GlaxoSmithKline pleaded guilty in March 2007 to 15 representative charges of breaching the Fair Trading Act by making misleading claims about the Vitamin C content of Ribena. GlaxoSmithKline was fined $227,500 and ordered to undertake a nationwide campaign of corrective advertising in newspapers to explain that some forms of Ribena contained no detectable level of vitamin C. The guilty pleas related to two kinds of misleading or false claims about Ribena made between March 2002 and March 2006. Five charges related to claims that ready-to-drink Ribena contain 7mg of vitamin C per 100ml. Testing found no vitamin C in the ready-to-drink product. Ten charges related to claims in TV adverts that "the blackcurrants in Ribena have four times the vitamin C of oranges." GlaxoSmithKline accepted that this statement was liable to mislead consumers.

The New Zealand Juice and Beverage Association represents the manufacturers of New Zealand's juice, carbonated drink and bottled water brands, and their suppliers. The Association has established a Voluntary Code of Practice that is aimed at ensuring accurate and truthful labelling on juice products. In particular, the Code signifies compliance with the relevant Food Regulations and Fair Trading requirements. This system is at the forefront of industry self-regulatory developments in New Zealand and over 95 per cent of the juice sold in New Zealand is supplied by NZJBA members who are signatories to the Code.

Pulp wash is the process by which soluble solids (mainly sugars) are recovered from fruit pulp. The soluble solids are leached from the pulp with water through a system of mixing screws and finishers which is the equipment used to separate the pulp from the juice in the processing plant. The liquid stream from a pulp wash system is referred to as pulp wash, secondary solids or WESOS (water extracted soluble orange solids).

WESOS has been described as a form of concentrate obtained from 'washing' the contents of the endocarp or internal components (including segment walls and cells) of the orange.

Kinnow (also Kinoo) is a variety of citrus fruit grown in Pakistan and north India, which resembles mandarin oranges.

Frucor application. On 7 July 2009, the Commerce Commission received an application under the Commerce Act from Frucor Beverages Ltd seeking clearance to acquire Simply Squeezed Holdings Ltd. In considering this application, the Commission's role is to determine whether the acquisition has the effect of substantially lessening competition in a market. This determination is not related to the Fair Trading Act investigation.