Commerce Commission settlement for DB Breweries
Issued 12 October 2001/103
Acknowledgement of a breach ends in Commerce Commission settlement for DB Breweries
DB Breweries' unequivocal acknowledgement that it breached the Fair Trading Act over mislabelling on its beer products and its immediate response to correct the breach were significant factors in the Commerce Commission's decision to settle with the Auckland-based brewing company.
Commissioner Paula Rebstock confirmed that an investigation led the Commission to consider DB had breached section 10 of the Fair Trading Act with the labelling on certain bottles and cans of its Tui and Monteith's beer. The labelling on those bottles and cans was liable to mislead consumers into believing Tui and Monteith's had been brewed solely in Mangatainoka and Greymouth.
"As soon as DB was informed by the Commission that it's Tui labels were liable to mislead, it took immediate steps to change the relevant labels," explained Ms Rebstock.
"DB changed its television advertising, stopped distributing the offending Tui cans and bottles by the end of July and altered its compliance programme to avoid such situations arising again.
"Such action, which included disposing of stocks of Tui cans and packaging, was at considerable cost to the company. The Commission places a lot of weight on a trader's willingness to admit a breach and DB demonstrated responsible and co-operative behaviour on this matter."
In addition to changes in relation to Tui, DB introduced new labelling for its Monteith's brand six months ago.
Ms Rebstock also highlighted why it was important such breaches were taken seriously.
"Building brands based on misleading information is a breach of the Act," she said. "Consumers buy niche products such as beer for all sorts of reasons, not only because of the taste. Sometimes the regional connotation is an incentive to buy a particular brand and for some consumers the thought of supporting the local economy is another reason."
As part of the settlement, DB has agreed to publish corrective newspaper advertising and will provide its principal retail distributors with point of sale notices for outlets selling Tui product.
Background The investigation commenced in March 2001 after it was brought to the notice of the Commission that whilst DB Breweries Ltd promoted its Tui beer as having been made in Mangatainoka, only the Tui beer sold in quart bottles and kegs is actually made there, while the Tui beer sold in 330ml bottles and cans, and 500ml cans is made in Auckland.
In May this year, the Commission also received a letter from a consumer claiming that the Monteith's beer that bears a number prefaced by a "W" is produced at DB's Waitemata Brewery and not the Monteith's brewery located at Greymouth. All Monteith's beer is now clearly labelled to where it is brewed.