High Court injunction stops Stefan's misleading advertising
Published07 Nov 1997
The Wellington High Court yesterday imposed injunctions on Enza subsidiary, Stefan's Fresh Juice Company, promotions of orange juice, after finding that the promotions were misleading and breached the Fair Trading Act.
Commerce Commission Chairman Dr Alan Bollard said that the Commission prosecuted Stefan's, alleging the company's promotions were misleading or deceptive in three ways.
· Stefan's claimed its juice was New Zealand made, when at times it contained no New Zealand juice at all, and at other times was a mixture of Australian and New Zealand juices.
· Stefan's advertising stated that the juice was squeezed, bottled and delivered daily, but the Australian juice used was four to 10 days old before it was shipped to New Zealand.
· Stefan's promoted the juice as a freshly squeezed product, but it had been treated and contained preservatives that gave it a shelf life of it up to 30 days.
Commission claimed that these claims were made in point of sale material, brochures, magazine advertisements and television advertisements.
Justice Greig found that the Commission had proved all its allegations and that Stefan's had misled the public and businesses that sold the juice.
Justice Greig said in his judgment: "the claims were that this was a New Zealand product out of orchards and trees of New Zealand within hours, or days at most, to the shelves of supermarkets and other trade outlets. The home-grown home-produced connotation was what the public and the trade were led to believe".
Justice Greig accepted that when Enza bought into Stefan's it knew that Stefan's had been using Australian juice, and that Enza continued to use Australian juice in Stefan's juice.
"This was not an insignificant importation or admixture of foreign juices but was a considerable amount sufficient to give the lie to the claims that this was a New Zealand product," Justice Greig said.
He said Enza had gone to considerable lengths to build on the New Zealand made, fresh, home squeezed, daily delivery image created by the original owner of Stefan's.
"To add preservatives to that or to have part of the product bought from off-shore over a period of days, is entirely contrary to that image. While the consumer may have been used to the misuse-use of fresh or freshness in relation to a number of other commodities the aim and purpose of the defendant here, building on the goodwill of the previous company, was to distance itself from that and to renew the meaning of freshness in relation to its product. It is not an answer to rely on compliance with the food regulations and the inconspicuous notice on the containers of the juice," Justice Greig said.
The Court ordered Stefan's to pay costs to the Commission. The amount has not yet been determined.
Dr Bollard said that the Commission had also asked the Court to order Stefan's to publish corrective advertising, but the Court considered that the breaches occurred too long ago for corrective advertising to be warranted.
"Only the High Court can impose a corrective advertising order, and a High Court trial takes considerably longer than one in the District Court. This makes it extremely unlikely that corrective advertising can be ordered soon after the breach occurred," Dr Bollard said.
"We are considering asking the Government to change the Fair Trading Act, so that the District Court can impose corrective advertising orders."
