Health Pride conviction: Judge's comments send strong warning but small fine disappoints Commission
Published06 Jul 1998
The conviction of a company selling health products, Health Pride Limited, has sent a strong message about how weight loss products should be checked before being promoted, but the Commerce Commission is disappointed with what it describes as the small fine imposed and will consider an appeal.
Commission Chairman Peter Allport said that promoters must get expert independent advice before making claims about weight loss products, or they risk breaching the Fair Trading Act.
Judge Michael Green had earlier described Health Pride's "fat busters" and "hunger busters" pills as "an unconscionable rip-off of an extremely vulnerable section of our society," and promotion of the Negative Calorie Book as "intellectually and scientifically dishonest".
When fining Health Pride a total of $4,000 today, Judge Green said that companies selling weight loss products must make significantly more effort to check their products than was done in this case.
Checking of the pills was limited to reliance on their manufacturer, some knowledge of Australian law but not New Zealand's, reading a book called the Vitamin Bible and having a consultant advise on labels.
In relation to the book, checking was limited to information from the publisher and previous reading of another book by the same author.
The Act includes a defence that a promoter who made false or misleading claims is not guilty if they had placed reasonable reliance on information provided by others.
Mr Allport said that the Commission is pleased that the Judge has said strongly that promoters of weight loss products must get expert independent advice to be able to use this defence.
"In the Commission's view Health Pride did little more than repeat the claims made by the manufacturer and publisher," he said. "We are pleased that the Judge has said that this is insufficient.
"This was the first case of its kind in New Zealand and promoters of weight loss products have been sent a warning from the Court.
"If the Court's warning is ignored, then other promoters could face considerably higher fines. And, importantly, the convictions in this case have made it easier for consumers, competitors and the Commission to take further legal action if that is necessary."
The Fair Trading Act prohibits misleading and deceptive conduct, and false or misleading representations.
Health Pride pleaded not guilty to breaching the Act in the way it promoted a "duet" of fat busters and hunger busters pills, and the Negative Calorie Book. It was found guilty and fined $1,500 on each charge. It pleaded guilty that its promotion of Nico Out cigarette filters breached the Act and was fined $1,000.
