Praneeta Mahajan
Hamilton, August 26, 2024
Milkio Foods Limited, a Hamilton-based dairy company, has been fined $420,000 after admitting to making false claims about the origin of some of its dairy products. The company had marketed its products with labels such as “100% Pure New Zealand” despite importing the core ingredient, butter, from India.
Impact on New Zealand’s Dairy Industry
The case was initially referred to the Commerce Commission by the Ministry for Primary Industries, following which, the penalty was imposed by Judge Ingram, who emphasised the severe repercussions these false claims could have on New Zealand’s dairy industry. He noted that the misrepresentations not only misled consumers but also undermined other producers who rely on the “New Zealand brand” to market their products globally. “The damage is not merely to consumers, but also to other producers who rely upon ‘brand New Zealand’ in connection with sales of dairy products,”
Safeguarding reputation
Commerce Commission Fair Trading General Manager Vanessa Horne highlighted the importance of the case in safeguarding New Zealand’s global reputation for high-quality dairy products. “New Zealand has built an international reputation for high-quality dairy products, which underpins the value of our dairy industry and exports,” she said.
“Milkio took advantage of this reputation to promote their own products through misleading descriptions like ‘from the clean green pasture-based dairy farms in New Zealand’ and ‘produced and manufactured in pristine New Zealand’ while using imported butter from India in some of their products.”
Misuse of FernMark and Regulatory Response
The company was also found to have used false and incomplete information to retain approval for using the FernMark logo and license number—a symbol trusted globally to signify products made in New Zealand.
Mr Ingram referred to the misuse of the FernMark as the “cherry on top of Milkio’s brand positioning strategy,” stating that it was intended to provide an “additional and unassailable layer of quality assurance to the consumer.” He further described Milkio’s actions as “wilful blindness, perhaps to the point of ‘commercial sleepwalking.'”
Ms Horne warned that this conviction should serve as a cautionary tale for others who might consider making false claims about the New Zealand brand. “The Commission will act to protect consumers and businesses who are upholding the requirements of the Fair Trading Act for accurate information that can be backed up by producers and retailers,” she said.
Milkio Foods Limited pleaded guilty to 15 breaches of the Fair Trading Act for making false representations about the origin of the butter used in their ghee products and unauthorised use of the FernMark logo and license number.
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
