In brief 5 min read
The New Zealand Court of Appeal considered an application by a honey producer seeking a declaration that the labelling of its honey products complied with the requirements for nutrition, health and related claims under the Food Standards Code. The Court of Appeal has clarified that in order for a claim to be a ‘health claim’ within the meaning of the Code, it must be a claim to an identified health benefit or effect.
How does it affect you?
- We previously reported on the new form of standard 1.2.7 and its potential broad reach. The New Zealand Court of Appeal has clarified that a general claim to unidentified benefits (eg, that a product is 'good for you') is not a 'health claim' within the meaning of the Food Standards Code (the Code) and is not prohibited.
- A claim must describe or indicate the relationship between the food or a component of the food to a specific health benefit or effect in order to be caught by the Code. Where such a claim is made it must conform to the requirements for general or high level health claims as set out in standard 1.2.7.
- A trade mark, considered alone, may be a 'health claim'
The background
Honey New Zealand (International) Limited and Manuka Doctor Limited (Honey NZ) are producers and exporters of honey, including manuka honey products under the brands MANUKA DOCTOR and MANUKA PHARM, both registered trade marks.
Section 61(1) of the Animal Products Act 1999 (NZ) provides that the Director-General of the Ministry for Primary Industries (MPI) may issue official assurances in respect of animal products that are to be exported overseas. MPI refused to issue export certificates for the MANUKA DOCTOR and MANUKA PHARM products on the basis that the products' labels breach the Code because they impermissibly claim health effects and therapeutic effects for their manuka honey. Honey NZ sought a declaration that its trade marks are not health claims (or therapeutic claims) as defined in the Code.
The Code
Standard 1.2.7, which sets out the requirements for nutrition, health and related claims, was introduced in June 2013. At that time, businesses could choose to either adopt the new standard or continue to operate under a transitional standard, with the transitional period ending on 18 January 2016. Honey NZ had committed to the new standard and so it was the only standard under consideration.
A 'claim' is defined to mean 'an express or implied statement, representation, design or information in relation to a food or a property of food which is not mandatory in this Code.' MPI and Honey NZ agreed that the products' labels met this definition.
A 'health claim' is defined to mean 'a claim which states, suggests or implies that a food or a property of food has, or may have, a health effect.' A 'health effect' is defined to mean an effect on the human body, including an effect on one or more of the following: a biochemical process or outcome; a physiological process or outcome; a functional process or outcome; growth and development; physical performance; mental performance; or a disease, disorder or condition.
The Code distinguishes 'high level health claims' from 'general level health claims'. A 'high level health claim' is a health claim which refers to a serious disease or a biomarker of a serious disease, whereas a 'general level health claim' is simply a health claim that is not a high level health claim.
Standard 1.2.7 provides two routes by which a general level health claim can be made:
- it must be based on, and meet the requirements of, the approved health claims set out in Schedule 4; or
- a food business can self-substantiate a food-health relationship in accordance with the requirements set out in standard 1.2.7.
A high level health claim is permitted where it is based on, and meets the requirements of, a food-health relationship pre-approved by FSANZ as set out in Schedule 4.
Standard 1.2.7 absolutely prohibits 'therapeutic claims', which are claims which refer to the prevention, diagnosis, cure or alleviation of a disease, disorder or condition.
At first instance
MPI asserted that the breach of standard 1.2.7 arose solely by the use of the trade marks MANUKA DOCTOR and MANUKA PHARM, arguing that they are implied health claims. It was not suggested that these alleged health claims satisfied the requirements of standard 1.2.7. Accordingly, if the trade marks were health claims (albeit of a general nature) they were prohibited.
Is a specific identified effect required before a claim is a health claim?
MPI argued that general unspecific claims come within the Code and are prohibited, or as an alternative, that a general claim is to be treated as being a claim about all of the specific effects identified in the definition of 'health effects'. MPI asserted that members of the public would see the use of MANUKA DOCTOR and MANUKA PHARM as claiming the products have health effects.
Honey NZ argued that to be a health claim, some specific effect, as set out in the definition of 'health effect' (eg, a claim directed to physical performance), must be claimed. Honey NZ relied upon the manner in which permitted health claims are expressed in the Code in support of its argument. For example, in relation to the food property calcium, a permitted 'specific health effect' for high level health claims is 'enhanced bone mineral density'. Honey NZ argued it was clear that the Code is aimed at controlling claims about identified health benefits, not general vague claims.
While Justice France accepted Honey NZ's interpretation of the Code that any permissible health claim will always require an identified benefit, his Honour said that the regime of authentication and verification of claimed health effects by proper research and testing cannot be circumvented by making an unsubstantiated general claim that a particular food will be 'good for you'. His Honour said that unsubstantiated and insufficiently verified claims about health benefits of food are not permitted:
The better interpretation of the scheme is that the only health claims that are permitted are substantiated claims about identified benefits. A general claim about unidentified benefits is a health claim, just not a permitted one.
Are MANUKA DOCTOR and MANUKA PHARM implied general health claims?
Honey NZ placed emphasis on the fact that MANUKA DOCTOR and MANUKA PHARM are trademarks, and therefore likely to be seen as identifying the source of the products rather than health effects. Honey NZ invoked the example of DR PEPPER (the soft drink), as it argued that no consumer would infer that this mark is making a health claims about its product. MPI argued that this ignored the particular context in which the MANUKA DOCTOR and MANUKA PHARM marks are being used, namely the long claimed association of manuka honey with health advantages and the association of the words DOCTOR and PHARM with health.
Justice France did not consider the fact that MANUKA DOCTOR and MANUKA PHARM are trade marks to be of particular significance. His Honour accepted that the public will approach the product using a reasonable measure of common sense, however, he considered that the use of DOCTOR and PHARM carries the 'clear possibility' they will be seen as suggesting the product is good for you, in part due to the common association of the concepts of DOCTOR and PHARM with health, healing and medicine.
Finally, his Honour said it was doubtful that the trade marks were therapeutic claims, although it was not necessary to decide the matter in light of his earlier findings.
Appeal
Honey NZ appealed the above findings in relation to its MANUKA DOCTOR branded products only.
The Court of Appeal acknowledged that the primary purpose of the Code is consumer protection and said that where claims of health effects are made, they are to be made in accordance with the standards prescribed by the Code. However, the Court of Appeal disagreed with the judge below that it necessarily followed that general claims of unidentified health benefits are prohibited, finding that the Code is aimed at claims of 'specific measureable health effects'. The Court of Appeal referred to FSANZ's Final Assessment Report, which explained that claims which 'do 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' were not intended to be caught by the Code. Further, the Court of Appeal said that the other purposes of the Code, such as avoiding unnecessary restrictions of trade, would not be achieved if the Code were interpreted as applying to general claims of unidentified effects.
The Court of Appeal also disagreed with the judge below that the trade mark MANUKA DOCTOR amounted to an implied general level health claim that the products are 'good for you'. While it was possible some members of the public might associate the word DOCTOR with health, healing and medicine, the Court of Appeal said that it was unlikely that a substantial number of relevant consumers exercising reasonable care would do so. Also, having regard to the product's labelling as a whole, their Honours considered that the use of the words MANUKA DOCTOR conveyed that the producers of the product are specialists in the quality and purity of honey.
The bee all and end all
Even though the decision is not binding on Australian courts, it will be highly persuasive particularly in the interests of achieving consistency in the application of the Code between Australia and New Zealand.
Food producers should take comfort that vague or generalised 'wellness' claims will not be caught by the Code, however producers are reminded that such claims remain subject to fair trading and consumer protection legislation which prohibits false and misleading statements in relation to goods.