By Stephanie Koumbarakos (Trainee Lawyer) and Koula Politis (Senior Associate)
Australia’s largest honey company, Capilano, is one of the retail brands stung for producing adulterated honey products sold in Australian retail outlets. The complaints arose after 28 samples of various brands tested by a leading international laboratory were found to contain ingredients other than honey.
The sale of adulterated honey constitutes food fraud which usually involves the mixing of honey with other ingredients such as cane sugar, corn and rice syrups to produce a food product that is intended to look and taste like honey but is, of course, not honey.
Australia New Zealand Food Standards Code Compliance
The Australia New Zealand Food Standards Code (the Code) has a prescribed standard for honey products. The Code clearly states that food sold as honey must, in fact, be honey and must comply with the specific requirements set out in the standard as to the composition of honey. The Code defines ‘honey’ to mean the natural sweet substance produced by honey bees from plant nectar which the honey bees collect, transform and combine with specific substances of their own, store and leave in the honeycomb to ripen and mature. A product that does not comply with the Code and contains other ingredients cannot be called honey.
The Code also requires that a food label lists each ingredient in the food (other than an ingredient of a flavouring substance or added water). A failure by manufacturers of honey products to list any ingredients included in the product other than honey on their labelling is a clear breach of this requirement. A failure to comply with the Code by causing food to be advertised, packaged or labelled in a way that falsely describes the food may result in penalties.
Monitoring compliance with the Code falls to various state-based regulators under state/territory Food Acts which have the power to impose penalties for breaches of the Code. For example, penalties under the Victorian Food Act 1984 can be up to $200,000.
Australian Consumer Law compliance
To label adulterated honey products as containing only honey or pure honey is also misleading and deceptive conduct in breach of the Australian Consumer Law (ACL).
A breach of the ACL can attract substantial penalties and fines which are imposed by the regulator, the Australian Competition and Consumer Commission (ACCC). The ACCC may issue infringement notices or decide to take legal action against a corporation that engages in this kind of misleading and deceptive conduct.
An infringement notice issued by the ACCC to a corporation can be up $12,600.00 per contravention for a private company or up to $126,000 for a listed company. If the ACCC decides to commence legal action, a corporation can be fined for the greater of $10,000,000 or three times the value of the benefit received, or 10% of annual turnover in the preceding 12 months, if the court cannot determine benefit obtained from the offence.
In 2014, the ACCC issued three infringement notices to Basfoods (Aust) Pty Ltd (Basfoods) in relation to its “Victoria Honey” product which was labelled as honey, when it mainly comprised of sugars from plants including corn and sugar cane. The total penalties payable by Basfoods was $30,600.00.
The ACCC has now launched an investigation against producers of adulterated or ‘fake’ honey products.
KHQ Food & Beverage is a tailored legal service for food and beverage businesses. If you have any questions about how these developments might impact on your business, please do not hesitate to get in touch with us.