Insights into litigation, sports law, media and legal culture

Maggie Beer, why did you fall on your sword when the umpire had not made a call?

Maggie Beer accepts her Senior Australian of the Year award at Parliament House on January 25, 2010 in Canberra, Australia. (Photo by Stefan Postles/Getty Images)

I do apologise unreservedly for mistakes that should not have happened through lack of rigour” – Maggie Beer, forthcoming article in Foodmagazine

Maggie Beer is one of Australia’s most beloved cooks, restaurateurs and purveyors of fine food products. She is also a well-known Barossa Valley identity, and a champion of the produce of this South Australian region. Yet this did not deter the Australian Competition and Consumer Commission (ACCC) from pursuing Maggie Beer for conduct said to mislead or deceive consumers by reason of the labels of some of her products. On 19 August 2014, the ACCC issued a media release under the heading: “Maggie Beer Products acknowledges labelling likely to be misleading”.

Yet, there has been no court decision. No umpire’s call from the judicial chair. The ACCC has extracted a settlement without the arguments being tested. An acknowledgment does not, in fact, mean that the ACCC is right.

To be frank, the ACCC’s case against Maggie Beer looks no more than arguable. A judge might well have gone the other way.

The main vice alleged by the ACCC was that some Maggie Beer products made “place of origin” representations, namely that their source was the Barossa Valley when in fact “Maggie Beer” branded ice cream, extra virgin olive oil and rosemary & verjuice biscuits were manufactured by third parties in Victoria, and “Maggie Beer” red wine vinegar was manufactured by a third party in Queensland. Quelle horreur!

How did this so-called vice come about?

First, the ‘Maggie Beer’ logo depicts a pheasant (no problem there) with the words “Maggie Beer A Barossa Food Tradition”.   Now, the term ‘tradition’ is defined in various dictionaries to mean the handing down of customs and beliefs from generation to generation. The concept of tradition does not mean: “my food is made here”. It could well be construed as an important qualifying statement. In other words, “A Barossa Food Tradition” might actually signpost the consumer to the fact that Maggie is using certain techniques to make her products, which is quite distinct from questions of source or manufacture.

Interestingly, given the case is very much about ‘manufacture’, it is unclear whether this term is intended just to cover the interstate location where (Barossa Valley) base ingredients were assembled, or whether the underlying ingredients were sourced from interstate as well.

Secondly, the ACCC points to the words “Made in Australia” or “Product of Australia” on the product labels as symptomatic of misleading conduct. For the life of me, I do not understand their point on this one. Even on the ACCC’s case the claim is true. The offending products might not have been made in South Australia. They were made in Victoria and Queensland. The last time I looked, these States remain part of Australia, despite the enthusiastic attempts of some secessionist movements. This is not a case about goods made overseas.

Thirdly, the ACCC says that the words “Maggie Beer Products: 2 Keith Street Tanunda South Australia 5352” on the product’s rear label denotes misleading conduct. Yes, that would be the address in tiny fine print that most consumers are unlikely to read. Further, for those consumers who do, they might well appreciate that this address means that this refers to the company’s principal place of business (which is incidentally required by food labeling laws), not the kitchen where every product is made.

How confident was the ACCC that each of the above representations might mislead or deceive consumers? The answer must be “not very” because their claim, in fact, depends on the “close proximity” of these representations on the labels. In other words, the totality of the claims apparently gives rise to the offending conduct. Complaint is not made about each stand-alone statement.

The source of the dispute, or at least the ACCC’s confidence that there was a case to answer, apparently concerns some issues arising between Maggie Beer Products and Woolworths. In 2013, a senior employee who Maggie said had not done his “normal due diligence”, told Woolworths that the offending products were manufactured in South Australia when this was incorrect.

To add insult to injury, also in 2013 a local Woolworths in Mitcham, South Australia, held a fair to which it invited producers of iconic South Australian brands, including Maggie Beer, to promote their products with free tastings. Free tastings were offered of the offending ice cream, and of the offending rosemary & verjuice biscuits, which we recall were manufactured in Victoria even though presumably in accordance with “A Barossa Food Tradition”.

So that we are clear, these matters might provide context. However, relevance to the case theory presented by the ACCC against Maggie Beer Products is tenuous at best. Normally, the alleged employee representation would be a separate and distinct allegation. The facts stated indicate no connection with the product labeling.

As for the Mitcham Woolworths’ fair, was this intended to support local products (which begs a definition of the term) or local brands? A judge might have much to say about whether this conduct was problematic at all.

If one accepts the proposition that the ACCC’s case is not exactly a lay down misère, how do consumers or industry benefit from the concessions made by Maggie Beer to avoid court?

These concessions include:

  • The deletion of “A Barossa Food Tradition” from the Maggie Beer Logo with respect to products manufactured elsewhere
  • Agreement to permit a third party compliance review of Maggie Beer Products’ procedures (for legal enthusiasts, note the absence of the audit the ACCC often requires)
  • Acknowledgment that the ACCC can publicise the undertaking by Maggie Beer Products
  • Agreement by Maggie Beer to publish a mea culpa in the industry publication Foodmagazine.

Interestingly, the ACCC has not required Maggie Beer to take out corrective advertising, something it normally insists upon. This might be because:

  • the ACCC’s focus was on educating industry;
  • the ACCC was concerned about the strength of its case and it agreed to ditch this to get the settlement over the line; or
  • the ACCC was confident its media release would gain sufficient press coverage to bring the issue to the attention of consumers.

The mea culpa to be published in Foodmagazine is annexed to the undertaking.   It is in the form of a personal reflection from Maggie Beer, containing a clear acknowledgment of unlawful conduct, an apology, an explanation for what occurred and a clear instruction to industry “to carefully review your food labeling practices to ensure compliance with the Act.”

Those general sentiments might be worthy and compelling, but one cannot help returning to the question of whether the public interest justifies the abject apology given a court did not have its say.

This is where one has regard to the task of the regulator. The ACCC is an “independent Commonwealth statutory body” (refer website). Yet like all such ‘independent’ bodies one is ultimately answerable to one’s Commonwealth master. There are Key Performance Measures, statistical indicators, and a host of other methods for ensuring such regulators are called to account.

Further, there are budgetary constraints, and the ACCC is (rightly) under pressure to spend money wisely and only on cases with a strong chance of success.

The pressure on a regulator to be independent, to avoid back room deals and pre-determined outcomes, has recently been scrutinized in a sporting context in the litigation between Essendon Football Club and the Australian Sports Anti Doping Authority (ASADA). In that case, much of the inner machinations within ASADA over a period of time were exposed.

Here, it is a different regulator plainly acting within its power. The ACCC has clear power to resolve disputes about misleading or deceptive conduct by extracting an undertaking from a party pursuant to section 87B of the Competition and Consumer Act 2010.

In the Maggie Beer media release the ACCC Chairman, Rod Sims explained the regulator’s policy objective: “Protecting the integrity of credence claims made about food products is a priority enforcement area for the ACCC”.

Yet questions remain about the scope and appropriateness of the section 87B undertaking process. A potential defendant might be advised that they have a reasonable defence. However, to avoid the prohibitive cost of defending a court case, they will agree to a penalty.

The ACCC obtains its educative media release. The defendant suffers damage to its business reputation.

Is the outcome of this negotiation a fair price for the pursuit of an admirable policy goal?

In the interests of full disclosure, the author is a proud Victorian who has learnt many a cooking technique by watching episodes of The Cook & the Chef presented by Maggie Beer and Simon Bryant

3 Responses to “Maggie Beer, why did you fall on your sword when the umpire had not made a call?”

  1. J Wharton

    Given the ACCC”s zealous approach, I am surprised that it did not go after Maggie Beer on the basis that her name mislead consumers as to the alcohol content in her food!!!! The use of the words “A Barossa Food tradition” would seem to be a very accurate of the description of the kind of food that Maggie Beer products try to replicate – and not its where it was produced. Great Article.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Basic HTML is allowed. Your email address will not be published.

Subscribe to this comment feed via RSS

%d bloggers like this: