The Australian Competition and Consumer Commission (ACCC) has called on Justice Richard White to impose an AU$10m ($7.4m) penalty on the local arm of global food giant Kraft-Heinz for implying its Little Kids Shredz products were healthy.
In March, the Federal Court in Adelaide concluded Heinz deliberately misled the public over the nutritional content of the Little Kids Shredz products, following proceedings filed against the company by the ACCC in June 2016.
The toddler snacks – made from 99% dehydrated fruit, vegetables and chia seed and free from preservatives, artificial colors or flavors – were toted to have the same nutritional value as fresh fruit, be a nutritious food for children aged one to three and would encourage healthy eating habits.
However, the company failed to state the snacks also contained 60% sugar, which, according to nutritionist Dr Rosemary Stanton, meant they “were more like confectionery.”
Egregious conduct
“The nature and characteristic of the conduct in this case is very serious, indeed it’s egregious,” counsel for the ACCC, Tom Duggan, said in a hearing.
He added that if the penalty “is not big enough, in the end it simply doesn’t represent a sufficient deterrent.
“The conduct of Heinz involved wilful blindness or recklessness.”
Total gross profit of range
Lawyers for Heinz disputed the claims.
“There are no facts that support that sort of character or description,” argued Michael O’Brien, adding Heinz “is a conscientious company.”
He suggested a penalty in the range of $400,000 would be more appropriate, which matched the total gross profit of the Little Kids Shredz range.
He added the $10m figure put forward by the ACCC was an “oppressive” prospect for Heinz.
Justice White is yet to impose a penalty.