Food giant Heinz has been hit with a $2.25 million fine after misleading consumers by claiming one of its snacks, marketed for toddlers, was beneficial for young children.
The Federal Court imposed the penalty on Friday, with Justice Richard White also ordering the company to set up a consumer protection law compliance program and maintain that program for three years.
But he refused requests from the Australian Competition and Consumer Commission to have Heinz publish corrections to its misleading material.
The ACCC had called for a $10 million fine and chair Rod Sims said the organisation would continue to advocate for stronger penalties to deter large companies from contravening consumer laws.
“The ACCC wants to ensure that penalties for breaches of the consumer law are large enough to get the attention of the financial markets, boards and senior management,” Ms Sims said in a statement.
Heinz said it “respects the decision that has been made” in regard to penalty.
It said the company remained committed to providing high-quality food products to consumers.
In a recent hearing, counsel for the ACCC Tom Duggan said the penalty imposed on Heinz had to be sufficient to act as a deterrent against similar conduct by the company and others operating in the food industry.
He argued the company’s conduct in representations on the packaging of its Little Kids Shredz was “egregious” because of the potential implications for the diet and oral health of young children and involved both “wilful blindness” and “recklessness”.
But Michael O’Brien, for Heinz, said there were no facts to support the company’s conduct being egregious and the court had ruled that while it made an error, it did not intend to mislead.
He said a penalty of around $400,000 would be more appropriate.
In a judgment in March, Justice White found the prominent statements on the packaging, that the Shredz snacks comprised 99 per cent fruit and vegetables together with the pictures of the fruit and vegetables, conjured impressions of nutritiousness and health.
“I am satisfied that each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to the health of children aged one to three years was misleading,” he said.
The Shredz products were a dehydrated snack made from 99 per cent fruit and vegetable ingredients and did not contain any preservatives, artificial colours or flavours but had a high sugar content.
More than one million were sold before the products were pulled from shelves in May 2016.