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Commerce Commission v New Zealand Health Food Company Ltd [2021] NZDC 15955

Published 30 June 2022

Sentencing — engaging in conduct liable to mislead the public — origin of goods — Fair Trading Act 1986, ss 10 & 40(1) — Dietary Supplements Regulations 1985 — Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 — Commerce Commission v Topline International Limited [2017] NZDC 9221 — Commerce Commission v Go Healthy New Zealand Limited [2019] NZDC 25295 — Budget Loans Limited v Commerce Commission [2018] NZHC 3442 — Australian Competition and Consumer Commission (ACCC) v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25 — Commerce Commission v Farmland Foods Limited [2019] NZDC 14839 — Moses v R [2020] NZCA 296. The defendant company was for sentence on three representative charges of engaging in conduct liable to mislead the public. It had marketed and labeled its royal jelly-containing products in a way that suggested that they were made from ingredients of New Zealand origin. In fact, the royal jelly and most of the other ingredients were imported. The effects of the offending were to mislead consumers who had purchased the products and undermine their ability to choose; to reduce trust in claims by other businesses to have New Zealand-made products; and to disadvantage the defendant's competitors who really had produced their products in New Zealand or who had imported their products without having claimed to produce them in New Zealand. Further, the defendant had given evidence in a prosecution against one of its competitors for similar offending, and had also had previous warnings from the prosecution about the importance of giving consumers accurate information on the origins of its products' ingredients. The Court characterised the defendant's conduct as reckless and set a start point for fine of $580,000. In mitigation, the defendant had pleaded guilty, cooperated with the investigation and was of otherwise good character. The final fine was $377,000. Judgment Date: 3 August 2021.