By Rod Sims, ACCC Chairman
When products from very large companies are portrayed as being those of small operators it misleads consumers and undermines the unique selling point that niche businesses depend upon.
A recent investigation into the marketing of Byron Bay Pale Lager serves as a warning that labelling must accurately reflect where products are from and who made them.
In April, Carlton & United Breweries (CUB) acknowledged that labelling may have misled consumers into thinking Byron Bay Pale Lager was brewed by a small local brewer in Byron Bay.
Bottle labels and packaging made extensive references to Bryon Bay. As well as the product name, the labels depicted the famous Cape Byron lighthouse and beach lifestyle. The back label featured text on the spirit of the bay and a map of the region pointing out the location of the Byron Bay Brewing Company.
An investigation revealed the beer was brewed and bottled by CUB in Warnervale, some 630km away from Byron Bay. The beer’s only connection with the bay is that the recipe is licenced from a small brewer in Byron Bay.
The Byron Bay Brewing Company does sell a beer by the same name but the beer is only sold on tap at its premises in Byron Bay. All bottled products are made by CUB at the Warnervale brewery.
As part of a court enforceable undertaking CUB agreed to cease distribution of the product with the misleading labelling. It will also provide corrective notices for retailers to display in-store.
More generally, CUB has undertaken not to make false or misleading representations about the scale of the brewery in which its products are brewed or the place of origin of its products. To resolve the matter, CUB also paid two Infringement Notices to the value of $20,400.
The outcome is important for a number of reasons. First and foremost, it protects the interests of both beer buyers and small brewers.
Whether it is beer, eggs or olive oil, consumers should be able to trust that the product matches the label. If consumers become sceptical about labelling claims and the origins of niche products, then innovation and competition will suffer.
Many small brewers cater to consumers who prefer to support small, niche businesses. This unique selling position needs to be protected. Allowing businesses to compete on their merits goes to the heart of market efficiency.
The CUB outcome is also important because it is a first in our new focus on marketing and labelling that portrays large manufacturers as small niche businesses. All companies are on notice that this is a priority area for the ACCC.
As well as enforcement, we have revised our advertising and selling guide for manufacturers, importers and retailers. The guide outlines the two fundamental rules of advertising and selling. First, do not engage in conduct that is likely to mislead or deceive. Second, do not make false or misleading claims or statements. We urge businesses to consider the overall impression created and take extra care when making credence claims.
Rod Sims is Chairman of the Australian Competition and Consumer Commission. The ACCC’s free online advertising and selling guide is available at www.accc.gov.au/publications/advertising-selling
This article was first published in Retail World in June 2014.