Legal Updates

Upset Over Vegan Meat Surprise – Fair Trading Act Reminder

The vegan burger patty pizza debacle

The Commerce Commission (“the Commission”) recently took issue with Hell Pizza as a result of its online advertising of the “Burger Pizza”.

On 21 June 2019, Hell Pizza began promoting its Burger Pizza, which was described as being “loaded with chunks of medium-rare burger patty”. On 25 June 2019, the description was amended to “medium-rare Beyond Meat™ burger patty”. The “Beyond Meat™” addition referred to the American company, which manufactures the plant-based patty.

On 27 June 2019, Hell Pizza disclosed on its website and social media that it had taken more than 3,000 customers by complete surprise with its meat-free Burger Pizza by revealing that the burger patty used was plant-based.

This led to several members of the public complaining to the Commission that Hell Pizza made false or misleading representations about the contents of the Burger Pizza by creating the impression to consumers that the Burger Pizza contained meat when it did not.

As a result, Hell Pizza stopped advertising the Burger Pizza on 1 July 2019.

The Fair Trading Act 1986

The Fair Trading Act 1986 (“the Act”) prohibits false and misleading behaviour by businesses in the promotion and sale of goods and services. In particular, section 13 (a) of the Act prohibits businesses from making false or misleading representations, in the supply or promotion of goods, that goods are of a particular kind and/or composition.

Breaching the Act can result in severe penalties. A company that breaches the Act can be fined up to $600,000 and an individual up to $200,000 per offence.

The Commission is responsible for enforcing and promoting compliance with a number of laws that promote competition in New Zealand, including the Act. If the Commission considers that there has been a breach of the Act, it may choose to take enforcement actions, such as issue a warning or commence proceedings in Court. The Court can then impose penalties where it finds the law has been breached.

In deciding what enforcement action to take, the Commission will consider the extent of the detriment caused, the seriousness of conduct and the public interest in the matter.

The Commerce Commission’s investigation

As part of the Commission’s investigation, it considered that a burger traditionally includes a patty of minced beef. The patty in the advertising was referred to as “medium-rare”, a term the Commission considers to be associated with meat, usually beef, indicating how thoroughly cooked it is. Furthermore, the Commission noted that there was no reference to the patty being vegetarian or plant based.

The Commission found that the overall impression conveyed to consumers by Hell Pizza’s initial advertising was that the product comprised meat, when in fact the patty was made from plant-based protein. As a result, Hell Pizza likely made false or misleading representations about the kind and/or composition of goods offered for sale, which is a breach of section 13 (a) of the Act.

Ultimately, the Commission decided that a warning was the appropriate response in this instance as the duration of the conduct was short, Hell Pizza has ceased to offer the Burger Pizza and has advised the Commission that it does not intend to engage in this sort of promotion again.

The “takeaway” here is that what you do not say can be as important as what you do say. The overall impression created matters. In short, if you can’t back it up, don’t say it!

If you have any questions relating to Fair Trading Act compliance, please contact Sarah, Jono and Nina.