As part of a settlement with the Commerce Commission NZ Bakels Limited will relabel its "Gluten Free Bread Mix" and write to all its clients because the mix contains gluten.

Commission Fair Trading Manager Rachel Leamy said that this investigation highlights an issue all food manufacturers and retailers must be aware of - Bakels' labelling complied with the Food Regulations but, in the Commission's view, still risked breaching the Fair Trading Act.

In a High Court case against the Fresh Juice Company, Justice Grieg stated: "It is not an answer to rely on compliance with the Food Regulations".

The Act prohibits false claims that goods are of a particular composition. Labelling food as "gluten free" when it contains gluten risks breaching the Act.

Ms Leamy said Bakels co-operated willingly with the Commission as soon as the Commission contacted it.

In addition to relabelling and contacting clients, the settlement includes signed undertakings requiring independent testing of any bread mix described as "gluten free" and publicity of the settlement. It also includes an acknowledgment that the Commission can take court action if the settlement is not honoured.

Food promotion is one of the key industries the Commission is focusing on.

"It is a multi-billion dollar a year industry," Ms Leamy said. "Food is one of the most basic necessities - everyone must eat.

"A promoter can make huge gains over competitors by using false or misleading claims and can also cause serious harm to consumers and, because of the size of the market, to the whole economy."

In this case, "Gluten Free Bread Mix" was sold to hospital pharmacies and other retailers. Due to medical conditions, some people cannot consume any gluten and others can consume only minute amounts.

Background

Section 13(a) of the Fair Trading Act prohibits claims that: "falsely represent that goods are of a particular composition".

The Commission has previously taken action against false or misleading claims about the amounts of fat in meat, the contents of fruit juice and the labelling of fish.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz