A Hamilton-based dairy company, Milkio Foods Limited, has been fined $420,000 after admitting to making false claims about the origin of its products, which were marketed as “100% Pure New Zealand” despite ingredients being imported from India.
The hefty penalty was handed down by the Hamilton District Court after the company pleaded guilty to 15 breaches of the Fair Trading Act.
The Commerce Commission, which brought the case against Milkio Foods, revealed that the company used deceptive practices to retain approval for the use of the prestigious FernMark logo and licence number. The FernMark, an internationally recognised symbol, is used to identify products genuinely made in New Zealand. However, Milkio Foods allegedly misrepresented the origin of the butter used in its ghee products, misleading consumers and damaging the integrity of the New Zealand brand.
In court, Milkio Foods admitted to making false representations about the country of origin of its products. The company had promoted its ghee as being “from the clean green pasture-based dairy farms in New Zealand” and “produced and manufactured in pristine New Zealand.” Despite these claims, it was revealed that the butter used in some of their products was sourced from India.
Vanessa Horne, the Commerce Commission’s general manager for fair trading, emphasised the seriousness of the breach, highlighting New Zealand’s global reputation for producing high-quality dairy products. She stated that Milkio Foods had taken unfair advantage of this reputation to promote its products.
“New Zealand has built a strong reputation for high-quality dairy products, which helps underpin the value of the dairy industry and exports,” Ms Horne said.
“Milkio took advantage of this reputation to promote their own 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.”
Ms Horne added that the conviction should serve as a stark warning to other companies that might consider falsely claiming the New Zealand brand to boost their products.
“This conviction should serve as a warning to others who may be looking to falsely claim the New Zealand brand. Such actions not only deceive consumers but also harm the trust that has been built around the integrity of New Zealand-made products,”
She said.
The case was brought to the attention of the Commerce Commission by the Ministry for Primary Industries (MPI), which had initially raised concerns about Milkio Foods’ use of the FernMark logo and the accuracy of its product labelling.
In response to the ruling, industry observers have noted that the case underscores the importance of maintaining transparency and honesty in product labelling, particularly for products associated with New Zealand’s strong reputation in the global dairy market.
The FernMark logo, a symbol of New Zealand’s quality and authenticity, is only granted to products that meet strict criteria set by the New Zealand government. The misuse of this logo by Milkio Foods not only misled consumers but also posed a risk to the credibility of other genuine New Zealand products.
The $420,000 fine is one of the largest penalties imposed for breaches of the Fair Trading Act in recent years and reflects the seriousness with which the courts and regulatory bodies treat such violations. The ruling is expected to have a significant impact on other businesses in the industry, serving as a deterrent to those who might consider similar practices.
Milkio Foods has yet to comment on the ruling, and it remains unclear how the company plans to address the damage to its reputation following the court’s decision.
The Commerce Commission has urged consumers to remain vigilant and report any concerns about potentially misleading product claims to ensure that the high standards associated with New Zealand-made products are upheld.
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