ACCC wants AU$10m penalty imposed on Kraft-Heinz for distorted claims on toddler snacks

By Gill Hyslop contact

- Last updated on GMT

The Federal Court has ruled Kraft-Heinz misled consumers by marketing its toddler snacks as 'healthy' and are now considering what penalty to impose. Pic: ©GettyImages/Ivanko_Brnjakovic
The Federal Court has ruled Kraft-Heinz misled consumers by marketing its toddler snacks as 'healthy' and are now considering what penalty to impose. Pic: ©GettyImages/Ivanko_Brnjakovic

Related tags: Kraft heinz, Australia, Children, Snacks, Sugar, Healthy snacks, Court, Little Kids Shredz, Fine, Confectionery

Australia's consumer watchdog is urging the court to rule Kraft-Heinz pay a hefty fine for misleading customers to act as a deterrent against similar conduct by others.

The Australian Competition and Consumer Commission (ACCC) has called on Justice Richard White to impose an AU$10m ($7.4m) penalty on the local arm of global food giant Kraft-Heinz for implying its Little Kids Shredz products were healthy.

In March, the Federal Court in Adelaide concluded Heinz deliberately misled the public over the nutritional content of the Little Kids Shredz products, following proceedings filed against the company by the ACCC in June 2016.

The toddler snacks – made from 99% dehydrated fruit, vegetables and chia seed and free from preservatives, artificial colors or flavors – were toted to have the same nutritional value as fresh fruit, be a nutritious food for children aged one to three and would encourage healthy eating habits.

However, the company failed to state the snacks also contained 60% sugar, which, according to nutritionist Dr Rosemary Stanton, meant they “were more like confectionery.”

Egregious conduct

“The nature and characteristic of the conduct in this case is very serious, indeed it’s egregious,” ​counsel for the ACCC, Tom Duggan, said in a hearing.

He added that if the penalty “is not big enough, in the end it simply doesn’t represent a sufficient deterrent.

“The conduct of Heinz involved wilful blindness or recklessness.”

Total gross profit of range

Lawyers for Heinz disputed the claims.

“There are no facts that support that sort of character or description​,” argued Michael O’Brien, adding Heinz “is a conscientious company.”

He suggested a penalty in the range of $400,000 would be more appropriate, which matched the total gross profit of the Little Kids Shredz range.

He added the $10m figure put forward by the ACCC was an “oppressive”​ prospect for Heinz.

Justice White is yet to impose a penalty.

Related topics: Kraft Foods, Health, Snacks, Manufacturers

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