What may anyone say about acai?

The general rule, in the law’s words

The consumer law is the outer rule, and it is written in general terms. Section 18 of the Australian Consumer Law provides that:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Competition and Consumer Act 2010, Schedule 2 (the Australian Consumer Law), s 18, on the Federal Register of Legislation

Section 29 is directed at representations about goods. It forbids a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model, or have had a particular history or particular previous use, and among its other limbs it forbids a false or misleading representation that goods have sponsorship, approval, performance characteristics, accessories, uses or benefits. Section 33 forbids conduct liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.

The ACCC states the working version of those rules for the businesses they bind: claims should be true, accurate and based on reasonable grounds; a business must be able to prove any claim it advertises; and the information or claim a business provides about its products must be accurate, truthful and based on reasonable grounds, whether it is about prices, images and descriptions, claims about the value, benefits, qualities or performance of products and services, or shipping options and delivery times. Intent is not a defence: it makes no difference whether a business intends to mislead or not. And the ACCC can require businesses to back up claims they make about their products or services.

A claim about food is also a claim about where it came from, if it touches origin. It is illegal to make false or misleading claims about country or place of origin, and anyone can report failures to comply with country of origin food labelling requirements, including misleading claims about where food comes from.

What Standard 1.2.7 sets out

Standard 1.2.7 sits over the top of that general law, and it deals with two kinds of claim, the nutrition content claim and the health claim. FSANZ describes the Standard’s scope in one sentence: it sets out requirements for making nutrition content and health claims about food.

The rule that carries the weight is about evidence. A health claim can only be based on a food-health relationship that has been substantiated according to Standard 1.2.7, and all health claims must be supported by scientific evidence to the same degree of certainty, whether they are pre-approved by FSANZ or self-substantiated by a food business.

Substantiation takes one of two routes. A food business wanting to make a general level health claim can base it on one of the more than 200 pre-approved food-health relationships in the Standard, or self-substantiate a relationship by following the process for systematic review in Schedule 6 of the Code. A high level health claim is narrower: it must be based on a pre-approved food-health relationship, and there are currently 13 pre-approved relationships for high level health claims in Schedule 4 of the Code. A business can also apply to FSANZ for pre-approval of a relationship supporting a general or high level claim.

Self-substantiation carries two duties that are easy to miss. A business that self-substantiates a food-health relationship must notify FSANZ of the relationship before making a claim on food labels or in advertisements. And it cannot simply borrow another business’s work: a business is not able to use a relationship in the list that has been notified by another food business, and to make a claim based on a relationship that is already on the list it must meet the systematic review requirements in Schedule 6 and notify the relationship.

Two compositional rules follow from a decision to claim. Foods displaying health claims must meet certain compositional requirements set out in the Standard, including the nutrient profiling scoring criterion. And there is a rule that closes a common gap: if the Code prohibits a label on or relating to food from including a statement, information, a design or a representation, an advertisement for that food must not include it either.

The tests, one at a time

The order matters, because each step can end the sentence. A sentence that claims a health effect and rests on nothing substantiated stops at the second step. A sentence that steps up to a high level claim without a pre-approved relationship stops at the third. A sentence resting on a self-substantiated relationship that was never notified stops at the fourth, and a sentence whose food fails the compositional requirements stops at the fifth.

1. Read the sentence and decide which kind of claim it is. Standard 1.2.7 sets out requirements for making nutrition content claims and health claims about food.
2. If it is a health claim, ask what relationship between the food and health it rests on. A health claim can only be based on a food-health relationship substantiated according to Standard 1.2.7, and the evidence has to stand at the same degree of certainty however the claim was substantiated.
3. Decide the level, because the level decides where the relationship may come from. A general level health claim may rest on one of the more than 200 pre-approved relationships or on a self-substantiated one; a high level health claim may only rest on a pre-approved relationship, and there are currently 13 of those in Schedule 4.
4. Before the sentence goes on a label or into an advertisement, notify FSANZ of a self-substantiated relationship, and do the Schedule 6 work again if the relationship is one another business has already notified.
5. Check the food against the compositional requirements the Standard sets for foods displaying health claims, including the nutrient profiling scoring criterion.
6. Take the sentence into advertising and read it again: a statement the Code prohibits on a label must not appear in an advertisement for that food.
7. Finally, read it against the consumer law, because the Code’s permissions do not license a misleading impression: any statement that creates a false impression about goods can be breaking the law, and a business must be able to prove the claims it makes, including a claim of a particular quality or benefit.

Anywhere a business communicates

The last place a sentence can go wrong is off the pack, because the claims rules reach past it. The ACCC states that its rule on accurate and truthful information applies to any communication by a business, including advertising, product packaging, a quotation, any information provided by staff whether verbally or in writing, social media, testimonials, and websites or any other platform. A sentence about food that is typed into a product page, a menu or a social post is inside the rule, and so is a sentence spoken across a counter.

Silence is inside it too. In some circumstances a failure to disclose information can be misleading, particularly where a business provides some information to a consumer but does not mention important details the consumer should know that are relevant to their decision.

Where the claim is about where food comes from, the standard and the consumer law meet: whether or not a business has to follow the country of origin labelling standard, its origin claims must be true, accurate and based on reasonable grounds, and the ACCC and other Australian Consumer Law regulators can call on businesses to substantiate the country of origin claims they make on their labels. Where a business has complied with the standard, it can rely on the statutory safe harbour if its origin claim is challenged under the Australian Consumer Law, but the defence has a limit: if the package displays extra images or representations that create an overall misleading impression, the business may still be at risk of breaching that law, and penalties may apply.

Reports about claims have their own route. The ACCC accepts reports about possible misleading or false claims, anyone can report a misleading claim about where food comes from, and the ACCC is direct about its limits: it does not resolve individual disputes about misleading claims, and it does not provide legal advice. A dispute between two businesses starts with the parties, in the ACCC’s own words: the first step is to contact the other business to explain the problem.