“Deception” a universal term recognised as a deliberate offence, deceiving an individual in an attempt to unfairly benefit yourself, or to disadvantage another individual. Considered an ethical issue, deception embodies the use of words, conduct and is deemed misrepresentation. Linking deception to marketing and advertising, deceptive advertisements have the potential to influence consumers about the nature of the advertised product, thereby causing individuals to alter their judgments.
Relevant studies reveal advertising deception and fakery potentially leads to defensive consumers and an increase in distrust towards further advertising claims. Numerous studies demonstrate increases in negative bias in consumers’ opinions concerning advertisements due to deceptive publicity.
Linking concept to law, Section 18 of the Australian Consumer Law prohibits conduct, in business or commerce, which is ‘misleading or deceptive or is probable to mislead or deceive’. We view such characteristics in 2018 where the Australian food-manufacturing corporation ‘Heinz’ publicised misleading and fabricated health benefits. The published claims misinformed consumers on the dietary contents of their ‘Heinz Little Kids Shredz’. Found guilty by the Federal Court of Australia, Heinz was fined $2.25 million as well as ordered to establish a consumer protection compliance program.
MARKETING & ADVERTISING: UNETHICAL BEHAVIOUR
In the field of marketing and advertising varying forms of marketing frameworks restrict the possibility for engagement in unethical behaviour. This is because the evaluative elements in the exchange process are evident to the consumer. This in turn enables the buyer to objectively judge the exchange situation in making an informed decision. Alternatively, there are such instances where consumers are unable to accurately understand and assess a products’ value, thereby creating scope for marketers to engage in unethical behaviour.
Linking this concept to the case of Heinz, the corporation engaged in misleading and deceptive advertising. In this instance, the companies’ actions were considered unethical as they advertised fabricated and misinformed statements whilst engaging in conduct liable to deceive consumers. Heinz ‘Little Kidz Shredz’ products were falsely advertised to be as nutritious as natural fruit and vegetables, where in fact 60% of the product contained sugar.
Advertising is considered an integral feature of a business entity. Corporations expend billions of dollars annually to promote their products. Advertising is a form of communication employed to persuade a targeted group to take on new action. Advertising is recognised as a vital component for economic growth of marketers and businesses in competition.
HOW ETHICAL ISSUES AFFECTS PROFESSIONAL PRACTICE
Ethics is defined as a code of principles, which govern the actions of an individual regarding what is right and what is wrong. Depending on the point of view, they determine our behaviour when confronted with a moral dilemma and are often subjective. Due to their nature of being subjective, ethical values fluctuate internationally. Ethical practices alongside unethical practices can influence marketing and in some circumstances, unethical behaviour can prompt government intervention.
It is known, professional practice in a marketing sense is likely to be subjective by ethical behaviour and issues. In a marketing deal, all existing parties hold expectations relating to how the business relationship will exist. Ethical marketing decision-making should exceed the needs of consumers, business associates and suppliers. Conversely, unethical behaviour including selective advertising, price wars and deceptive publicising has the power to negatively impact a corporation’s relationships.
Current trends display an increase in consumers’ favouring ethical companies. Consequently, ethics itself is a selling point and a key aspect of a company’s image.
HEINZ CASE PROCEEDINGS & OUTCOMES
The foundation of this case was built around the advertising code of ethics, which states ‘advertising or marketing communications must not be misleading or deceptive’. In a struggle to prove the wrongdoings of Heinz, the court ruled that the ACCC insufficiently proved the ‘Kidz Shredz’ product to have illustrated that they were of equal dietary value to that of fruit and vegetables. Moreover, They were unable to demonstrate that the products encouraged the development of healthy eating habits in children.
In summary, the court agreed the statements and illustrations published on the packaging, conjured up the impressions of nutrition and health.
Subsequently, the Shredz product range, which was available nationally in supermarkets since 2013, is now no longer for sale. In addition to the case, The World Health Organisation (WHO) recommended reducing the consumption of products containing fruit juice concentrate in an effort to minimise the risk of obesity.
“We welcome the Court’s decision today which shows that businesses that make false or misleading claims about the health benefits of products face serious consequences,”
– ACCC Acting Chair Delia Rickard –
HOW IS DECEPTIVE ADVERTISING PUNISHED?
In the case of deceptive publication, an advertiser may be able to repair the damages done without incurring further consequences depending on the severity of the breach of false advertising laws. In relation to the law, section 29 of the Australian Consumer Law states it is unlawful to ‘make a false or misleading representation that goods are of a particular standard, quality or value’.
In the ruling for Heinz’s advertising breach, counsel Tom Duggan of the ACCC claimed Heinz to have a substantial penalty imposed to act as a warning. The Federal Court of Adelaide found the action of Heinz Corporation involved “willful” and “recklessness”. Furthermore, the ACCC argued the seriousness of the situation due to the possible implications for the health of young children.
“Each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two thirds sugar was beneficial to the health of children aged 1-3 years was misleading”
– Justice Richard White –
MARKETING & ADVERTISING CONSIDERATIONS
In relation to the Heinz vs ACCC deceptive advertising case, there are several precautions companies can employ to minimise the risk of breaching the Australian Consumer Law. Firstly, food production companies should ensure their product development and marketing evaluation process encourages thorough consideration of the accuracy of any product claims, including claims that may be implied from product packaging.
Linking considerations to the case, one in particular directly correlates. In order to avoid infringements of the ACL, companies must not assume the presence of nutrients and ingredient information. Required by the Australia New Zealand Food Standards Code, will “cure” any untruthful representations about the “healthiness” of the product.
The nutritional information depicting the ‘Shredz’ product contained two-thirds sugar had no impact on the court’s verdict that Heinz had breached the ACL. Considered by the court, it was improbable that consumers would examine the nutritional ingredients prior to purchasing. Conclusively, this demonstrates how fine print cannot counteract the leading marketing message.
Leonard K 