Commerce Commission v Go Healthy New Zealand Ltd [2019] NZDC 25295

Published 14 February 2020

Sentencing — false or misleading representations — origin of goods — “New Zealand made” — health supplements — Commerce Commission v New Zealand Nutritionals (2004) Ltd [2016] NZHC 832 — Marcol Manufacturers Ltd v Commerce Commission [1991] 2 NZLR 502 — Commerce Commission v L D Nathan [1990] 2 NZLR 160 — Commerce Commission v Topline International Ltd [2017] NZDC 9221 — Commerce Commission v Farmland Foods Ltd [2019] NZDC 14839 — Fair Trading Act 1986, subs 13(j). The defendant appeared for sentencing on three representative charges of making false or misleading representations, under subs 13(j) of the Fair Trading Act. It was a company that produced health supplements, and over a four-year period it made false or misleading claims in its advertising that its products were made in New Zealand. In fact more than 85 per cent of the defendant's products did not originate in New Zealand. The Commerce Commission had previously notified the defendant that the claim was potentially misleading; the defendant had then made some adjustments to its promotional material, but the potential to mislead remained. The Commerce Commission argued that the defendant's claims undermined the value of the phrase "made in New Zealand", misled consumers into buying its product under false pretenses, and gave it an unfair advantage over its competitors that made it clear that their products were not made in New Zealand. The Commerce Commission argued that the defendant's conduct was reckless. The defendant argued that its conduct had been careless but not reckless, because even though its advertisements had made claims that were incorrect, the actual products provided accurate information on their origins. The Court found that the defendant's conduct had been a mixture of carelessness and recklessness. The defendant's claims had given it an unfair advantage over its competitors and disadvantaged consumers, and its claims had been widely disseminated. In mitigation the defendant had made ongoing efforts to meet required advertising standards. The Court set a start point for fine of $500,000, and allowed discounts for cooperation with the investigation, lack of prior offending, attempts to comply, and guilty plea. The final amount of fine was $337,500. Judgment Date: 9 December 2019.