Dairy Company Fined USD 420,000 for Misleading '100% Pure New Zealand' Products

The Commerce Commission of New Zealand says that Milkio Foods Limited, a Hamilton-based dairy company, has been fined USD 420,000 for misleading customers about the origin of some of its dairy products. The company falsely claimed that its products were “100% Pure New Zealand,” despite importing the core ingredient from India.

Judge Ingram, who determined the penalty, highlighted the significant harm that such misrepresentations could cause to New Zealand's dairy industry. He noted that the damage extends beyond consumers to other producers who rely on the “Brand New Zealand” reputation to market their dairy products globally.

Vanessa Horne, the General Manager of Fair Trading at the Commerce Commission, highlighted the significance of this case for the Commission. She explained that New Zealand has built a global reputation for producing high-quality dairy products, a reputation that is vital to the country's dairy industry and exports. According to Horne, Milkio took advantage of this reputation by marketing their products with claims that they were sourced from New Zealand’s clean, green, pasture-based dairy farms and manufactured in pristine conditions within the country, even though some of their products contained imported butter from India.

Milkio also provided false and incomplete information to obtain approval for the use of the FernMark logo and licence number, a symbol internationally recognized as an indicator of New Zealand-made products. Judge Ingram described Milkio's use of the FernMark as the “cherry on top” of their branding strategy, intended to give consumers an added layer of quality assurance.

Judge Ingram further criticized the company for what he termed “wilful blindness,” or a level of negligence that he compared to “commercial sleepwalking.”

Horne highlighted that the conviction should serve as a warning to any business considering false claims about the New Zealand brand. She affirmed that the Commission will take action to protect consumers and businesses that comply with the Fair-Trading Act by ensuring that the information provided is accurate and verifiable.

Milkio Foods pleaded guilty to 15 breaches of the Fair-Trading Act, including making false representations about the country of origin of the butter used in their ghee products and unauthorized use of the FernMark logo and licence number.