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GRC Professional : GRC Autumn 2013
10 GRC Professional • Autumn 2013 IN DEPTH After instituting proceedings in March against Luv-a-Duck, a duck meat supplier, for misleading and deceptive promotion and supply of its products as "range reared and grain fed", ACCC Commissioner Sarah Court warned: "The ACCC's Compliance and Enforcement Policy lists credence claims as a new priority area, particularly those in the food industry with the potential to have a significant impact on consumers." ACI SAYS: It has never been more important for boards and senior management to be engaged with and to make sure that compliance and risk management are consulted when strategic activities try to appeal to specialised or new consumer trends, or look for creative ways to differentiate products. GRC professionals need to be at the start of this process to assist with the execution of a more effective (and compliant) strategy to achieve intended business outcomes. While the basic underlying regulatory principle is that any product claims made must be true, managing the risks associated with this kind of marketing or product strategy can be a little more complex when definitions and consumer understanding of what is meant by a statement, may be in a grey area. Egg claims The poultry industry has become the world's leading protein source: chicken meat and eggs are accessible, versatile, cheap and cost-efficient to produce and easily transported and stored. For Australian consumers, poultry as a food staple has spawned a set of alternatives and variants: free range, vegetarian, RSPCA-approved, organic, barn-laid, cage-free -- the descriptors have literally outrun their definitions, with terms not commonly under stood or agreed upon. Although last year saw a crescendo of court- enforced undertakings for misleading or deceptive labelling of 'free range' products, eggs have drawn the ire of the ACCC since its earliest days. In 1996, the health benefits claims about eggs enriched with omega--3 fatty acids were found to be misleading or deceptive, a nd health benefits claims have since come into their own, requiring new standards from Food Standards Australia New Zealand (FSANZ). The misleading brand names 'Safe Eggs' and 'Heart Smart' also had to be withdrawn, and standard-testing procedures implemented to quantify the omega--3 content of eggs. In 2011, when an egg wholesaler was ordered by the Federal Court to pay $50,000 in civil penalties for falsely selling its eggs as free range, the ACCC said the proceedings should act as a warning to the Australian egg industry that selling eggs that are not true to label is a serious matter that would receive strong enforcement action to stop similar conduct. A similar case involving the term 'organic' in 2007 was won by the ACCC despite the difficulty posed given the absence of any recognised definition of the term. The defendants paid $270,000 to assist in the development of a national standard for organic and biodynamic produce, and it has been largely left to industry to repeat this for 'free range' claims. The composition of food, origin, means of production and potential health effects now weigh upon purchasing decisions.
GRC Summer 2013