Hamilton-based dairy company Milkio Foods Limited has been fined $420,000.
Milkio Foods was fined for misleading customers about the origin of some of its dairy products. The company claimed “100 percent Pure New Zealand” despite importing the core ingredient from India.
In deciding the penalty amount, Judge Ingram emphasised the significant damage the misrepresentations could do to the New Zealand dairy industry, noting the damage was “not merely to consumers, but also to other producers who rely upon “brand New Zealand” in connection with sales of dairy products.”
Commerce Commission Fair Trading General Manager Vanessa Horne said this was a critical case for the Commission to prosecute because of the global value of New Zealand’s export brand.
“New Zealand has built an international reputation for high-quality dairy products, which underpins the value of our dairy industry and exports,” said Horne.
“Milkio took advantage of this reputation to promote their products through the use of descriptions like “from the clean green pasture-based dairy farms in New Zealand,” and “produced and manufactured in pristine New Zealand” despite some of their products using imported butter from India.”
Milkio used false and incomplete information to retain approval to use the FernMark logo and licence number, a trusted symbol used internationally to identify products made in New Zealand.
Judge Ingram referred to FernMark as the “cherry on top of Milkio’s brand positioning strategy…intended to provide an additional and unassailable layer of quality assurance to the consumer.”
“In this case, the claimed level of negligence or carelessness reaches a level that might fairly be described as wilful blindness, perhaps to the point of “commercial sleepwalking”, Judge Ingram said.
Horne added that this conviction should warn others not to claim the New Zealand brand falsely. The Commission will protect consumers and businesses that uphold the requirements of the Fair Trading Act for accurate information that producers and retailers can back up.
Milkio pleaded guilty to 15 breaches of the Fair Trading Act for making false representations about the country of origin of the butter used in their ghee products and using the FernMark logo and licence number without proper authorisation.
The case was referred to the Commission by the Ministry of Primary Industries.
