Souvenir company and director fined
18 March 2005
Souvenir company and director fined a total of $35,000 for false UMF honey labels
‘Tomorrow Dream Line Limited’ and its former director Sang Rae Kim were sentenced and fined $35,000 in the Auckland District Court today for breaching the Fair Trading Act by making false representations about the ‘Unique Manuka Factor’ (UMF) in honey sold through its Auckland Dream Line Souvenir shops and other tourist outlets and about who was packing the honey product supplied by the company.
Judge Thorburn fined Tomorrow Dream Line and Mr Kim $20,000 and $15,000 respectively for breaching sections 13 and 16 of the Fair Trading Act, as well as total court costs of $520. Section 16 of the Act prohibits certain conduct in relation to trade marks, while section 13 deals with false or misleading representations.
His Honour said that the defendants’ conduct was a “complete denial and subversion” of the regulatory goals of the legislation. He went on to state the defendants’ counsel had acknowledged his clients’ complete failure to acknowledge the principles of the Act.
He added that a complete failure to comply on the basis of a failure to appreciate the consequences is all very well, but even more concerning was that Mr Kim's actions showed an “extraordinary degree of deceptiveness, dishonesty and fundamental absence of good old integrity”.
His Honour went on to say that Mr Kim was “overtly ripping off the public by being as dishonest as anyone” he had met in this area. Further, that this was an “outstanding slur on the business community” with “down stream repercussions on the brand UMF”.
A UMF rating measures the natural antibacterial activity of certain Manuka honey and the trademark ‘UMF’ is registered by the Active Manuka Honey Association Inc.
Commission Chair Paula Rebstock said that honey with a UMF rating sells at a premium over ordinary Manuka honey and can be up to ten times the normal retail value of ordinary honey.
“Over 2,500 jars of honey with the misleading UMF labels were sold by Tomorrow Dream Line – which would have meant a profit of over $27,000 due to the premium prices charged,” said Ms Rebstock.
“In the Commission’s view, this was a blatant breach of the Fair Trading Act with consequences for consumers, who paid an unwarranted premium price for the honey, and for genuine licensees of the registered UMF trademark. Misuse of the UMF trademark has the potential to damage the export honey industry and the reputation of the Active Manuka Honey Association.”
The Commerce Commission first laid informations against Tomorrow Dream Line and Mr Kim in September 2004 following allegations that the company was falsely representing honey for sale as ‘U.M.F. 16+’, ‘U.M.F 12+’, ‘U.M.F. 12’ and ‘Active Manuka Honey’. The real trade mark is “UMF”. Tomorrow Dream Line and Mr Kim admitted labelling honey jars with representations about UMF content when the company had no knowledge of whether the honey was in fact Active Manuka Honey or whether it had any UMF rating.
Following the filing of the first set of informations, the Commission then became aware of further incorrect labels by Tomorrow Dream Line Limited and Mr Kim. A subsequent investigation revealed that Tomorrow Dream Line had commissioned genuine UMF honey to be packed for them, and had then used the producer’s genuine UMF labels (bearing the producer’s name as packer) to re-label non-UMF honey packed by an unknown party.
The investigation revealed that a batch number from the genuine UMF honey product had been forged and used by Tomorrow Dream Line Limited on honey supplied by the company. Despite representations to the contrary, the honey was not UMF honey and not packed by the genuine UMF honey producer as purported on the labels. This non-UMF honey was packed in different shaped jars and the forged batch numbers used on the labels were in a different size and font to the real product.
Further informations in respect of these alleged breaches of the Act were subsequently filed in November 2004. Guilty pleas were subsequently entered to 28 charges by both defendants.