Milkio Foods fined for misleading claims

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Hamilton-based dairy company Milkio Foods Limited has been fined $420,000 for misleading customers about the origin of some of its dairy products.

The company made claims such as “100% pure New Zealand” despite importing the core ingredient from India.

In deciding the penalty to be imposed by the Commerce Commission, Judge Thomas Ingram emphasised the significant damage the misrepresentations could do to the New Zealand dairy industry, noting 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”.

Milkio also used false and incomplete information to retain approval to use the FernMark logo and licence number, which is a trusted symbol used internationally to identify products made in New Zealand. 

Ingram referred to the use of FernMark as the “cherry on top of Milkio’s brand positioning strategy … intended to provide an additional and unassailable layer of quality assurance to the consumer”.

“In this case the claimed level of negligence or carelessness reaches a level that might fairly be described as willful blindness, perhaps to the point of ‘commercial sleepwalking’,” Ingram said.

“This conviction should serve as a warning to others who may be looking to falsely claim the New Zealand brand.”

Commerce Commission fair trading general manager Vanessa Horne said it was an important case for the commission to prosecute because of the global value of New Zealand’s export brand.

“New Zealand has built an international reputation for high quality dairy products, which underpins the value of our dairy industry and exports,” 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.”

Milkio pleaded guilty to 15 breaches of the Fair Trading Act for making false representations about the country of origin of the butter used in its ghee products, and using the FernMark logo and licence number without proper authorisation. 

The case was referred to the commission by the Ministry for Primary Industries.