Honey New Zealand (International) Limited decision and health claims in the food industry

Introduction

Honey New Zealand (International) Limited v. Director General of the Ministry for Primary Industries [2016] NZCA 141 considered the interpretation of the Food Standards Code (the “Code”) relating to a honey product exported under the “Manuka Doctor” trademark.

The New Zealand Court of Appeal (the “Court”) held that the “Manuka Doctor” trademark did not constitute a “health claim” within the scope of the Code.  This article examines the decision, and considers its implications for the food industry.

Facts

Honey New Zealand (International) Limited (“Honey NZ”) produced and exported honey under the “Manuka Doctor” trademark.  However, the Ministry for Primary Industries (“MPI”) was unwilling to issue export certificates for the product, on the basis that Honey NZ’s labels breached the Code because the wording “Manuka Doctor” constituted an impermissible “health claim” under the Code.

A “health claim” for the purposes of the Food Act 1981 (the “Act”) is a claim which states, suggests or implies that a food or a property of food has, or may have, a health effect.  The Code imposes a general prohibition on a “health claim” unless it meets nutrient profiling scoring criteria and complies with the requirements of a high level or general level health claim.

MPI argued that “Manuka Doctor” was a general level health claim, which can only be permitted if the food complies with the Code or the maker of the health claim notifies MPI of the food and health effects to be established by a process of systematic review set out in the Code.

Honey NZ sought a declaratory ruling from the High Court that it was not in breach of the Code.  The High Court Judge declined on the basis that the wording implied Manuka honey had properties making it “good for your health”, finding that unsubstantiated and insufficiently ratified claims about the health benefits of food are not permitted.  Honey NZ challenged this finding in the Court.

Ruling

The issue was whether “Manuka Doctor” was a “health claim”, which essentially requires that there be an effect on the human body.  The Court found that the Act and Code had a consumer protection purpose.  Consumers are to be properly and accurately informed so they can make appropriate choices.  Misleading statements are to be prevented.

While claims of health effects must be made in line with the Code, it did not follow that general claims of unidentified health claims were prohibited.  The Code targets claims of specific, measurable health effects.

The Final Assessment Report of Food Standards Australia New Zealand reports that while a “broad capture” of claims was intended, the Code would not cover claims that “did not explicitly or implicitly indicate the presence or absence of a property of the food or claims that do not describe or indicate the relationship between food or a specific component of food and a health effect”.  Examples include: “this food is organic”, “halal food”, and “farm fresh”.  The Court found close parallels between “farm fresh” and “Manuka Doctor”, which implied it would be “good for you”.

The Court also referred to the statutory purpose of the Code, which included the desirability of avoiding unnecessary restrictions on trade.  To interpret the Code as applying to general claims of unidentified benefits or effects would not achieve this aim.  The Court thought it very unlikely that a claim that “Manuka Doctor” was “good for you” (if established) would mislead consumers into buying the product when they would not have otherwise done so.

The High Court was wrong to conclude that the use of “Doctor” carried a connotation the product was “good for you” and therefore implied a general level health claim.  The Court Justices opposed the lower court's findings by referencing trademarks such as “Dr Pepper”, “Doctor Kracker” and “Rug Doctor” as examples of brands that referenced “doctor” for purposes other than health claims.  While it was possible some members of the consumer public would associate “Doctor” with health, healing and medicine, it was thought unlikely that a substantial number of relevant consumers exercising reasonable care would make that association.

Furthermore, “Manuka Doctor” was intended to signify that Honey NZ was a specialist in honey purity and quality, evidenced by the back of the label, which had information relating to product testing.  The Court thought that consumers exercising reasonable care would have regard to the label as a whole, and conclude that the wording related to Honey NZ’s expertise and its assurance of purity and quality.  It was also thought unlikely that substantial numbers of the consumer public would make the connection between the health benefits of honey as a wound dressing and the wording “Manuka Doctor”, so as to conclude that honey would be “good for you”.

The Court concluded that the words “Manuka Doctor” did not constitute a health claim within the meaning of the Code, and consequently the appeal was allowed.

Conclusion

It is important to note the emphasis placed by the Court on consumer protection under the Act and Code throughout this judgment.  The regulations in question exist primarily for the benefit of the consumer public, and a fine balance must be struck between those interests and that of New Zealand businesses to trade freely.  In reaching its decision, the Court bore in mind the perspective of what a reasonable consumer would expect and assume from the “Manuka Doctor” claim.

For clients in the food industry, this case particularly demonstrates the importance of ensuring that representations to the consumer public are honest and accurate in order to enable informed decision making.

If you would like further information please contact Laura Monahan on 07 958 7479.