THYME TO RETHINK PENALTIES: FAKE OREGANO SCANDAL FOURTH IN FIVE MONTHS

TIM HAMMOND MP
SHADOW MINISTER FOR CONSUMER AFFAIRS
SHADOW MINISTER ASSISTING FOR RESOURCES

FEDERAL MEMBER FOR PERTH

THYME TO RETHINK PENALTIES: FAKE OREGANO SCANDAL FOURTH IN FIVE MONTHS

Labor welcomes today’s announcement by the ACCC that they are penalising Hoyt’s Food $10,800 for misleading consumers about their oregano product, but remains concerned about whether current penalties under the Australian Consumer Law are an effective deterrent to anti-consumer behaviour.

Hoyt’s Foods received the penalty after distributing packets of ‘oregano’ that were cut with up to 50 per cent olive leaves. They are the fourth oregano distributer since November to be named by the ACCC as having misrepresented the purity of their oregano.

Notwithstanding the penalty imposed upon Hoyt’s Foods, Labor remains concerned that the penalties being meted out by the ACCC are not adequate in deterring companies from breaching the Australian Consumer Law, and that penalties are regarded by some companies as an extra cost to factor into the production of a dodgy product.

Many companies treat the penalties they receive from ACCC enforcement action as ‘just another cost of doing business’. While it is unclear how much money Hoyt’s Foods made from cutting its oregano with olive leaves, there are a number of recent examples of penalties being far lower than the profits derived from anti-consumer behaviour.

Currently businesses that contravene the consumer protection provisions of the Competition and Consumer Act 2010 are subject to maximum penalties of $1.1 million per incident, compared with a maximum penalty of $10m for contraventions of the competition provisions of the Act.

The most egregious recent example of the failure of the ACCC’s deterrence for consumer law was when Nurofen was fined only $6 million for making misleading representations. Nurofen is estimated to have made around $63 million from the misleading representations.

Labor has repeatedly called for penalties for consumer law breaches to be raised to align them with penalties for breaches of competition law. Labor reiterated its call in its submission to the Australian Consumer Law Review, which is due to report later this month.

The ACCC’s announcement can be found here: http://www.accc.gov.au/media-release/hoyts-food-pays-10800-penalty-for-alleged-false-and-misleading-oregano-representations