The Federal Court has ordered by consent that Pepe’s Ducks Ltd pay $375,000 in civil pecuniary penalties and $25,000 in costs arising from statements made that its ducks were ‘open range’ and ‘grown nature’s way’, in circumstances where the ducks grown by Pepe’s Ducks were raised in barns and were not allowed to spend any of their time outdoors.
Pepe’s Ducks used the phrase ‘open range’ from 2004 to 2012 and the phrase ‘grown nature’s way’ from 2007 to 2012 on its product packaging, website, delivery vehicles, signage, stationery and/or merchandise, often in conjunction with a pictorial representation of a duck in the outdoors walking on grass against a background of a lake with hills behind.
Pepe’s Ducks is a leading supplier of duck meat products (with approximately 40% market share), and supplied around 80,000 ducks per week in Australia in 2011. The phrases were part of an important promotional message used by Pepe’s Ducks and were communicated to a large number of wholesale and retail customers of duck meat products.
“Consumers must be able to trust that what is on the label is true and accurate. This penalty is a warning to businesses to make sure they are not misleading consumers into paying a premium for products that don’t match the claims made on the label,” ACCC Commissioner Sarah Court said.
“Traders who abuse the trust of Australian consumers in this way expose themselves to enforcement action."
In addition to penalties and costs, the Court declared by consent that Pepe’s Ducks, by its conduct, had contravened provisions of the Australian Consumer Law (formerly part of the Trade Practices Act), and made the following orders by consent:
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an order restraining Pepe’s Ducks for a period of 3 years from using the phrases ‘open range’ or ‘grown nature’s way’ on its product packaging, website, delivery vehicles, signage, stationery and merchandise (save for a limited exception relating to supply to certain wholesale customers by 17 February 2013 of certain pre-packaged frozen products). The Court also restrained Pepe’s Ducks for a period of 3 years from using the pictorial representation it had previously used without the words 'Barn Raised' prominently displayed in close proximity to the pictorial
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an order that Pepe’s Ducks implement a trade practices compliance program by 1 February 2013 and maintain it for a period of 3 years; and
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an order that Pepe’s Ducks provide corrective notices to its customers and on its website and business premises.
The ACCC welcomes the Court orders and notes that this decision continues its focus upon protecting consumers from misleading statements regarding food production methods. For example, on 19 December 2011 the Federal Court made orders against Turi Foods Pty Ltd (trading as La Ionica) in relation to misleading representations made by La Ionica that its meat chickens were raised and grown in barns in which the chickens had at all times substantial space available allowing them to roam around freely, when this was not the case. The orders included an order that La Ionica pay a civil pecuniary penalty in the amount of $100,000.