$1m penalty for misleading Nurofen specific pain range claims
3 February 2017
Reckitt Benckiser (New Zealand) Limited (RBNZ) has been fined $1.08 million today in the Auckland District Court for 10 charges relating to its Nurofen specific pain range products. The products include Nurofen Migraine Pain, Nurofen Tension Headache, Nurofen Period Pain and Nurofen Back Pain.
RBNZ admitted that between 2011 and 2015 its packaging of the products and representations on the nurofen.co.nz website were liable to mislead consumers about the nature, characteristics and suitability of the products.
The product packaging stated that the products “targeted” a particular type of pain, when this was not the case. Each product contained exactly the same active ingredient, 342 mg ibuprofen lysine, and each worked identically to the other products. The website contained a number of statements and a product comparison page which gave the overall impression that RBNZ had created separately formulated products to target and relieve specific types of pain when that was not the case.
Commerce Commission Chairman Dr Mark Berry said, “The packaging of these products and the website gave consumers the impression that the products were targeted to relieve a specific kind of pain. In fact, the products all contained the same ingredients and worked identically, to alleviate inflammation and pain generally, but were not specifically formulated to treat a particular area of pain. Consumers paid significantly more for these products compared to other ibuprofen products that would have had a similar effect.
“RBNZ was made aware in 2011 and 2013 through a media article and a complaint to the Australian Therapeutic Goods Administration that the products were potentially misleading, yet continued to market and sell the products.”
“The Commission will continue to take cases where traders do not promote their products truthfully. Products need to be as described on the box, and these were not. We take a particularly dim view when goods for human consumption are misdescribed; especially where pharmaceutical or healthcare products are not promoted truthfully. With these types of products consumers have little opportunity to verify the claims being made and tend to rely heavily on what they are told by the trader. To be able to choose the product best suited for them, consumers must have accurate and reliable information,” said Dr Berry.
In sentencing RBNZ today, Judge Jelas described RBNZ’s behaviour as “highly misleading” and noted it was “blatantly apparent they were in breach of their lawful obligations to New Zealand consumers”.
“Without the misleading statements the reason for the products existence disappears. There was no reason to choose one over the other.”
Judge Jelas accepted that RBNZ had expressed its remorse for its conduct, but only after the Commission opened its investigation, having ignored previous warnings and publicity in the media.
Half of the conduct charged occurred before the 2014 changes to the Fair Trading Act which increased the maximum corporate penalty for breaching the Act from $200,000 to $600,000.
RBNZ distributes and markets a variety of health, hygiene and home products, including brands such as Nurofen, Dettol and Mortein. RBNZ is one of the main distributors of non-prescription pain killers in New Zealand.
RBNZ is wholly owned by Reckitt Benckiser Healthcare Australia Pty Limited (RBH). Reckitt Benckiser (Australia) Pty Limited (RBA) is also a wholly owned subsidiary of RBH. RBA sold the products in Australia in the same packaging.
History of case in New Zealand
RBNZ took the website pages down in July 2015. In December 2015 RBNZ entered into Court Enforceable Undertakings with the Commission where it agreed to re-label the pain specific products.
History of case in Australia
In December 2015, following action by the ACCC the Federal Court of Australia declared by consent that the packaging of the products and the Nurofen Australia website were likely to have been misleading or deceptive.
In December 2016 the Full Federal Court of Australia increased the civil penalty imposed on Reckitt Benckiser (Australia) Pty Limited (RBA) from AUD $1.7 million to AUD $6 million. RBA have filed an application for special leave to appeal the Full Federal Court’s decision.
RBNZ’s prior knowledge
RBNZ was aware that the products were potentially misleading to the public prior to the Commission’s investigation. In May 2011 the New Zealand Herald on Sunday featured the products, and quoted marketing experts who described the potential of the products to mislead.
In 2013 the Australian Therapeutic Goods Administration (ATGA) Complaints Resolution Panel found that material on the Nurofen Australia website was misleading and that the names of the products conveyed that they each had different ingredients and would have an effect in the named pain site, and not elsewhere, when that was not the case. RBNZ continued to market and sell the products despite these developments.