Reckitt Benckiser to plead guilty to misleading ads

Monday 26 September 2016 10:22 AM

Reckitt Benckiser to plead guilty to misleading ads over Nurofen claims

By Paul McBeth

Sept. 26 (BusinessDesk) - Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says.

The regulator brought 10 charges under the Fair Trading Act against the local division of the consumer goods business, eight of which claim the packaging and promotion of four Nurofen products were misleading, and two that the online advertising of the range was likely to mislead or deceive consumers, it said in a statement. The commission said Reckitt Benckiser had cooperated with the investigation and intended to plead guilty to the charges.

"The commission alleges that both the website and the packaging of these products gave the overall impression that the products were targeted to provide relief for a specific kind of pain," it said. "The commission alleges this was misleading because the pain specific products contained the same ingredients and were equally effective in treating any of the types of pain specified."

Reckitt Benckiser had already agreed to enforceable undertakings to change the packaging of the specific pain range and had taken down the offending website pages prior to that.

The regulator's probe began after the Australian Competition and Consumer Commission won a case against Reckitt Benckiser for misleading consumers with the painkiller's packaging. The ACCC is appealing the A$1.7 million fine imposed as being too small, with a hearing scheduled for November.

In a separate statement, the company said the products accounted for just 5 percent of the New Zealand Nurofen range, and that all Nurofen products with the same active ingredient, pack-size, format and formulation carry the same recommended retail price.

"This court action applies to New Zealand only and does not apply to other countries/regions or to other products in the Nurofen range," it said.

Reckitt Benckiser reported sales of $127.8 million in calendar 2015, though the slashing of goodwill pushed earnings to a loss of $48.8 million. The consumer goods firm cut $51.8 million from goodwill - which represents the premium paid over the fair value of identifiable assets in an acquisition - valuing the intangible asset at $79.4 million as at Dec. 31.

Both the regulator and the company said they wouldn't comment further because the matter is before the courts.

(BusinessDesk)

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