Careless marketing campaigns cost companies millions
- April 27, 2016
- 1 Comment
The recent finding in the Federal Court of misleading and deceptive conduct in relation to marketing and packaging of products should act as an eye opener for all companies marketing products to consumers on Australian shelves.
It was determined in a case brought by the ACCC against Nurofen that misleading and deceptive conduct had occurred due to representation that each specific pain product:
– was designed and formulated to treat and was effective in solely treating a particular type of pain, such as menstrual, headache and back pains
The reality of the products were that they were identical.
For misleading and deceptive conduct to be proven before the court, the primary rule is that the conduct and understanding derived from it (namely, that the medication was pain specific) does not merely cause confusion, but instead actually leads reasonable consumers to an erroneous conclusion as to the actual formulation of the product (McWilliams Wines Pty Ltd v McDonald’s System of Australia Ltd). Reckitt Benckiser, the manufacturer of Nurofen products, was found to lead consumers to an erroneous conclusion from their packaging that their products were pain specific, with consumers even paying more for Nurofen products than competing products in consequence of such conclusions.
Another recent case which found packaging to be misleading to Australian consumers was in ACCC v Coles whereby the Supermarket chain was held to have mislead consumers to the erroneous conclusion that their bread was baked freshly in store on the same day as purchase from scratch. The reality that the bread was actually partially baked prior to entering the store for it’s final stages of baking, packaging and sale was not adequately conveyed.
Nurofen is estimated to pay between $4 and $6 million (Evans 2015; Dole 2016).
Coles was ordered to pay penalties totalling $10 million.
These penalties act as an eye opener for all companies who are marketing and selling products to consumers as harmless marketing strategies targeted at increasing sales by the use of a few words, may lead to the consequence of a few million dollars.
Evans, L 2015 ‘Nurofen Fined Millions for Misleading and Deceptive Conduct Claims’, Learning Seat Blog, retrieved 27 April, 2016, http://www.learningseat.com.au/blog/2015/12/15/nurofen-fined-millions-for-misleading-and-deceptive-conduct-claims/.
Dole, N 2016 ‘Nurofen facing $6m headache for misleading consumers over pain-relief products’, ABC News, retrieved 27 April, 2016, http://www.abc.net.au/news/2016-04-12/nurofen-should-be-fined-6-million-for-misleading-consumers-accc/7319932.
McWilliams Wines Pty Ltd v McDonald’s System of Australia Ltd  49 FLR 455
ACCC v Coles Supermarkets Australia Pty Ltd  FCA 1405