Discussion Paper

Voluntary GM-Free Labelling

April 2003

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Appendix Two: Fair Trading Act 1986

• Fines and Offences under the Act

The Fair Trading Act (the "Act") is generic consumer protection legislation that prohibits misleading and deceptive conduct in trade.

Section 10 of the Act provides:

No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, haracteristics, suitability for a purpose, or quantity of goods.

Section 13(a) of the Act provides:

No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services make a false or misleading representation that goods are of a particular kind, standard, quality, grade, quantity, composition, style, or model, or have had a particular history or particular previous use.

The Act does not require the mandatory disclosure of information about food. But information voluntarily disclosed about food, through words pictures or other representations, will be in breach of the Act if it misleads or deceives consumers about a food's:

• composition
• age
• quality
• quantity
• nutritional quality
• origin
• health benefits
• desirability.

In interpreting whether a claim is misleading, the courts will examine the overall impression given by the labelling; additional information given as fine print is unlikely to provide a successful defence if the overall impression of the labelling is misleading. Information disclosed by a supplier does not have to be intentionally, or deliberately misleading, to be in breach of the Act.

Fines and Offences under the Act

The Commerce Commission, competitors or consumers can take action for a breach of the Act. Section 40 sets out offences for a breach of the Act's provisions. It provides for fines of up to $30,000 for individuals and $100,000 for companies.