All six charges related to a television advertising campaign that ran from March to May 2008 for Simply Squeezed Chilled Orange Juice. The advertising campaign gave the impression that the product was predominantly made from New Zealand squeezed orange juice.

A television advertisement used images of CapeKidnappers and ripe oranges hanging from a tree combined with the voice over stating 'Made in the HawkesBay' and 'Simply Squeezed - you couldn't pick a tastier juice' which gave the strong impression that the product was predominantly made from New Zealand squeezed orange juice.  However, at the time of the campaign, just over 50 per cent of the product was from squeezed New Zealand juice and the remainder was imported reconstituted juice made from concentrate. The reconstituted juice included water extracted soluble orange solids (known as WESOS) and imported kinnow juice concentrate.

Although the advertisement included a statement 'Using local and imported ingredients', this was in white font and small print and on screen for approximately three seconds.

"Businesses need to take care when designing their marketing and advertising campaigns that the overall message is not misleading or deceptive. Any messages in 'fine print' must correspond with the general claims, be noticeable and be easily read," said Graham Gill, Commerce Commission's Fair Trading Branch Manager, Auckland.

"It is important that consumers have accurate information to be able to make informed decisions about the products that they purchase. Many consumers prefer to buy products that are New Zealand in origin. 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 Gill.

Mr Gill also noted that it was disappointing to see Brownlie Brothers before the courts again, as the company had previously been prosecuted for offending under the Fair Trading Act in 2004 for misleading product labelling and television advertising of the same product following an industry wide investigation targeted at dealing with a variety of misleading claims in the juice industry. In July 2009, the Commission also warned Brownlie Brothers that aspects of their labelling of the Simply Squeezed Chilled Orange Juice may breach the Fair Trading Act.

The Commission has developed a set of free resources to help businesses comply with the Fair Trading Act. These resources include a check sheet for marketing and advertising campaigns and can be downloaded from the Commission's website www.comcom.govt.nz under Developing a Fair Trading Compliance Programme.

"The Commission is strongly advising businesses to use these free materials to help develop their own compliance programme," said Mr Gill.

The Commission will continue to monitor claims made by 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. On 25 August 2009 the Commerce Commission cleared Frucor Beverages Limited (Frucor) to acquire Simply Squeezed Holdings Ltd and/or Brownlie Brothers Ltd (Simply Squeezed).

At the time of advertising Simply Squeezed Chilled Orange Juice was made from the following ingredients:

Squeezed orange juice

46.7%

Local

Reconstituted orange juice*

41.5%

Imported

Orange not from concentrate (NFC)

5%

Imported

Mandarin juice

5%

Local

Liquid Sugar - 67%

1.8%

Imported

Ascorbic Acid USP 26-Vitamin C (KEG)

Less than 1%

Imported

Potassium Sorbate (G)

Less than 1%

Imported

*Of this reconstituted orange juice, 41% of it consisted of water extracted soluble

orange solids (WESOS) and 34% of it consisted of reconstituted mandarin juice

(Kinnow).  See explanations of WESOS and Kinnow below.

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 (which was also warned in relation to labelling);
  • Frucor Beverages Limited;
  • Rio Beverages Limited;
  • Greenway orchards Limited;
  • First Choice Limited;
  • Foodstuffs (New Zealand) Limited; and
  • Coca Cola Amatil (NZ) Limited.

Settlements were entered into with:

  • Progressive Enterprises Limited in 2002 in relation to misleading labelling of its OrgaNicZ product;
  • 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.

Brownlie Brothers Limited trading as Simply Squeezed was warned by the Commission in July 2009 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 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.

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.

WESOS or water extracted 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).

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

The New Zealand Juice and Beverage Association (NZJBA) 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.