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Is a $6 million fine too low for falsely labelling Nurofen packets?

To recap, what Reckitt Benckiser did between 2011 and 2015 was to sell the identical pain relief product - Nurofen - in 4 differently labelled packets, at almost twice the price of the standard Nurofen packet - see photo.

The Federal Court found that the labels were misleading. The four packets had labels which stated that they were targeted for different pain - one for Migraine Pain, one for Tension Headaches, one for Back Pain and one for Period Pain. In fact, each packet contained the same tablet, and could be taken to relieve any of the pains.

The trial judge fined Reckitt Benckiser $1.7 million which the appeal court increased to $6 million.

The question is - was the fine still too low considering that sales were about $45 million, with at least $20 million in profit? In other words, is a fine of $6 million high enough to discourage it hapening again, or is it too low and so will it be considered just the cost of doing business?

Belatedly, the Australian Competition and Consumer Commission which had asked for the $6 million fine agrees. It now proposes that fines based on profits derived from the offending conduct - as high as 3 times the profits.

Too late for the Nurofen case - the horse has bolted!

For a detailed analysis click Higher penalties are coming for conscious breaches of the Australian Consumer Law


What happens to the seller if the oregano you buy is 50% olive leaf?

Dried oregano gives a spicy Mediterranean flavour to tomato, pizza, beans and lamb.

It was therefore a matter of great concern when the Australian consumer watchdog, the ACCC, tested packages labelled Oregano, 100% Oregano and pure Oregano and found impurities, mainly olive leaf.

While oregano does grow around olive trees, to have 50% of the package consisting of olive leaves is more than just a coincidence! It was proof positive for the ACCC to pursue suppliers and retailers who marketed the oregano for misleading the public.

And so it was that the ACCC has punished the oregano suppliers and retailers for not taking precautions to ensure that the oregano they sold was unadulterated.

Some were reprimanded after taking action to remedy the misrepresentation, others provided court enforceable undertakings to test the products for 3 years, and Hoyt's Foods was fined $10,800. They were all 'named and shamed' by the ACCC in media releases.

For more detail, click on my article - ACCC protects consumers against false marketing of oregano


There’s no such thing as a free bet in Australia

Free drinks, free coffee, free samples, free admission ... all these offers use the word free to catch the attention of the customer to sell a service or product.

So it was that the online gambling company, Bet365 decided to use the phrase $200 FREE BETS FOR NEW CUSTOMERS on the Opening Page of its website. It was very successful - active users increased by 83% over the previous year and wagering revenues increased fourfold.

There was only one problem - when they posted the FREE BETS phrase, they put an asterisk after the word CUSTOMERS*, but did not put a click through button '*Terms & Conditions Apply' underneath. Had they done so, then the new customer have learned that they could only claim $200 in free bets if they staked three times that amount and could withdraw their winnings only if other conditions were satisfied.

Bet365 were prosecuted by the Australian Consumer Regulator, the ACCC, because Bet365 had displayed the FREE BETS phrase on its website without the Terms & Conditions click through button for 302 days. The Federal Court found that this was likely to mislead consumers and fined the two Bet365 companies involved a total of $2,750,000 for breaching the Australian Consumer Law.

There are two lessons here - for the consumer, there is no such thing as a free bet (or anything else) because terms and conditions apply; and for businesses, to make sure that the terms and conditions which apply to free offers are available to the consumer at the point where the free offer is displayed.

For more information from a legal perspective, and for Michael Field's comments from a marketing perspective, click There's no such thing as a free bet in Australia


Did you know that all Nurofen Specific Pain Range tablets have the same active ingredient?

Would you be angry if you were told that despite the label "Migraine Pain' and the distinctive violet packet, the tablet you are buying is exactly the same as the one in in the green packet labelled 'Back Pain' or the burgundy packet "Tension Headache' or the magenta packet 'Period Pain'?

The Australian Consumer & Competition Commission became so angry with the makers of Nurofen, Reckitt Benckiser, that last year they prosecuted them for misleading labelling, in breach of the Australian Consumer Law.

Last week, the Federal Court ordered Reckitt Benckiser to pay a fine of $1.7 million for its misleading packaging and website. In addition, they were ordered to change their packaging to make it clear that the tablet was suitable for the relief of all kinds of pain.

So, next time you are in a pharmacy or supermarket looking around for a pain relief medication, look at the Nurofen Specific Pain Range packets, see how they are labelled as good for specific pain, and notice how they all contain the same active ingredient - ibuprofen lysine 342 mg

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How the Nurofen Specific Pain Range marketing strategy was undone as misleading by the ACCC

It was a brilliant marketing strategy … instead of marketing the fast-acting Nurofen for pain relief as one product effective for a range of pains (as the standard Nurofen is marketed), to market it as four products targeted to specific pains, namely migraine pain, tension headache, period pain and back pain. It’s known as segmenting the market.

This marketing strategy was undone as misleading as a result of the recent decision of the Federal Court of Australia (Edelman J) in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 4) [2015] FCA 1408 (11 December 2015).

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Not Everything Is Fresh Today!

Coles Supermarkets position fresh fruit, fresh cut flowers and fresh vegetables at the entrance to give shoppers the impression of entering into a natural oasis where everything is fresh today.  

As the shopper passes by the fresh produce displays, according to the Coles website they see the “golden baked crust” and smell “tempting aromas” of the fresh bread displays below the “Baked Today, Sold Today” signage at the “Coles Bakery”.

Is it any wonder that the shopper believes that the bread displayed was freshly baked on site?

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Coles fined 3 cents per loaf for misleading 'par-baked bread' marketing

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