solution

‘SF’ Pty Ltd is a large company which produces a range of sweet snack foods for children. The company has observed high growth in a related area of the market, namely, the healthy snack food segment of the snack food industry for children. Businesses with products falling into this expanding category pride themselves on formulating food items of nutritional value containing low percentages of sugar, sodium, and no artificial additives. Intending to capitalise on the expanding market for healthy snack foods, SF introduce a new range of food items called ‘Natural Yummies’. The range quickly becomes incredibly popular. A Natural Yummies product which is doing particularly well are Natural Yummies snack bars.

Edward is the owner of a small company called ‘Delicious and Nutritious’ Pty Ltd (DN) which prides itself on producing a range of healthy snack bars formulated for children. The snack bars are low in sugar and sodium, contain no artificial additives and are high in protein.

Given the success of the Natural Yummies snack bars, SF is now a very strong competitor in the healthy snack food segment of the snack food industry for children. Edward has become concerned about how SF is marketing its Natural Yummies snack bars. The packaging makes numerous assertions on the box:

• “No nasties in Natural Yummies snack bars!”
• “The yummiest snack bars your kids will ever eat!”
• “Formulated in partnership with our nutritionists to give your child the healthy snack they deserve.”

The packaging has an animated drawing of a laughing child juggling different fruits.

Edward thinks that the combination of imagery and statements SF is using on the Natural Yummies snack bar range leads consumers to believe that the snack food is beneficial for consumption by young children because they are represented as being healthy when they are not. A close look at the Nutrition Information indicates that Natural Yummies snack bars contain three types of artificial preservatives to lengthen shelf life and, whilst the snack bars do contain comparable high amounts of protein, they also contain a high percentage of sugar. In comparison, DN’s snack bars contains no artificial additives and are low in sugar and sodium. Edward of DN lodges a complaint alleging that SF is in breach of s 18 of the Australian Consumer Law.

Does Edward of DN have a legitimate claim against SF under section 18 of the Australian Consumer Law? Answer this problem question using the IRAC method taught in class.