Heinz fined $1.65m over misleading health claim

By Gill Hyslop contact

- Last updated on GMT

Heinz has been ordered to pay $1.65m in penalties for misleading claims that its Little Kids Shredz products were beneficial to the health of kids depite comprising 60% sugar. Pic: ©GettyImages/Taborsk
Heinz has been ordered to pay $1.65m in penalties for misleading claims that its Little Kids Shredz products were beneficial to the health of kids depite comprising 60% sugar. Pic: ©GettyImages/Taborsk

Related tags: Penalty, Australia, Australian competition and consumer commission, Little Kids Shredz

The Federal Court of Australia has ordered H.J. Heinz Company Australia Ltd (Heinz) to pay an AU$2.25m (US$1.65m) penalty for misleading health claim that its Little Kids Shredz products were beneficial to the health of young children.

Earlier this month, the consumer watchdog had asked the court to impose an AU$10m (US$7.3m) fine on Heinz.

The Australian Competition and Consumer Commission (ACCC) wanted the penalty for breaches of consumer law to be large enough to get the attention of the financial markets, boards and senior management.

However, Judge Richard White has ordered Heinz to pay penalties totalling AU$2.25m, which includes ACCC’s court costs.

In March, the Federal Court found Heinz had breached Australian Consumer Law by claiming its Little Kids Shredz products were beneficial for the health of kiddies between the ages of 1-3.

The court also ruled that Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to health of children was misleading.

Stronger penalties

ACCC’s chair Rod Sims said the ACCC is carefully considering the judgement.

“The Heinz Group is one of the largest food companies in the world. We will continue to advocate for stronger penalties to deter large companies from engaging in serious contraventions of Australia’s consumer laws, particularly now that Parliament has passed legislation substantially increasing the maximum penalties for breaches of the ACL,”​ he said.

The court also ordered Heinz to establish a consumer law compliance program.

Heinz has filed an appeal.

Related topics: Kraft Foods, Health, Snacks, Manufacturers

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