More free range claims under the spotlight

The Federal Court has ordered by consent that Luv-a-Duck Pty Ltd (Luv-a-Duck) pay $360,000 in civil pecuniary penalties following action by the Australian Competition and Consumer Commission. The Court also ordered Luv-a-Duck to pay $15,000 towards the ACCC’s costs.

Luv-a-Duck is a large supplier of duck meat products, with a market share of about 40 per cent for duck meat products in Australia, selling around 80,000 ducks per week.

The Court declared by consent that Luv-a-Duck engaged in misleading or deceptive conduct (or conduct likely to mislead or deceive) and made false representations by using words on its packaging, website, brochures and in a promotion for the Good Food & Wine Show in Adelaide in 2012, that its ducks were:

  • grown and grain fed in the spacious Victorian Wimmera Wheatlands’; and/or
  • range reared and grain fed’ (which mainly appeared as a logo).

The ACCC argued that these descriptions represented Luv-a-Duck’s duck meat products were or will be processed from ducks that:

  • spent at least a substantial amount of their time outdoors;
  • were raised in a spacious outdoor environment; and
  • were of a different quality than duck meat products processed from barn-raised ducks,

when this was not the case.

In fact, the duck meat products that Luv-a-Duck sold or offered for sale were processed from ducks that did not spend any of their time outside of their barn.

Justice Davies stated it was reasonable to infer that Luv-a-Duck’s representations “…would have been an inducement to consumers to prefer Luv-a-Duck’s products and give Luv-a-Duck a competitive advantage in the industry.”

“This penalty is a further warning to the poultry industry and businesses generally that consumers are entitled to trust that what is said on product packaging and other promotional product material is true and accurate,” ACCC Commissioner Sarah Court said.

“Traders who abuse the trust of Australian consumers may also find themselves exposed to similar enforcement action.”

“Credence claims which represent that a product possesses a premium attribute are a priority area for the ACCC, particularly those in the food and beverage industry with the potential to influence consumers and disadvantage competitors,” Ms Court said.

In addition to the penalties and costs, the Court also made consent orders:

  • restraining Luv-a-Duck for a period of three years from using the phrases ‘grown and grain fed in the spacious Victorian Wimmera Wheatlands’ and ‘ranged reared and grain fed’ or modifications of those words when its ducks are not raised in such conditions;
  • requiring Luv-a-Duck to publish corrective notices on its website and business premises and send a corrective notice to its customers; and
  • requiring Luv-a-Duck to implement and maintain a trade practices compliance program for three years.

This is the second court outcome this week relating to a processor and supplier in the Australian poultry industry contravening the Australian Consumer Law (and former Trade Practices Act).