It's common knowledge that labelling and advertising of foods must be "truthful and not misleading," but what does this really mean, and what do companies have to do to comply? Recently, this column looked at the due diligence defence available to food companies in Canada. This defence needs to be carefully considered, not only with respect to food safety, but also labelling and advertising.
Making food claims that are not misleading to consumers can be a difficult feat. This is especially true as marketers come up with new claims to differentiate products and meet changing consumer preferences, including expectations regarding food production and social responsibility (for example, animal welfare).
While the Canadian Food Inspection Agency (CFIA) has published some interpretative guidance for potentially misleading claims under section 5(1) of the Food and Drugs Act and section 7(2) of the Consumer Packaging and Labelling Act, the onus is on companies to ensure they are compliant. At minimum, this should entail a two-step analysis of potential claims, taking "reasonable care" to ensure claims are truthful and not misleading, as required for a due diligence defence.
1. Is the claim true?
Depending on the supply chain from farm to table, ensuring truthfulness can be complicated. For example, consider a claim for cage-free eggs.
The farmer who cares for the hens can be confident this claim is true, but what about a food retailer? If the retailer buys directly from the farmer, did they do an on-site visit to ensure cages weren't being used? Do they have a contract in place with the farmer that warrants the hens are, and always will be, housed without cages? Is a third-party certification system being relied upon?
If there is a grader or processor between the farmer and the retailer, does the processor only process cage-free eggs? If not, what system is in place to ensure the cage-free eggs aren't co-mingled with other eggs? What contracts and/or verification activities does the retailer have in place with the processor and any other members of the supply chain to ensure the cage-free claim is always true?
Ultimately, the company making the claim needs to consider what action it has taken to ensure the claim is true, both before the claim is made and on a going-forward basis, and whether that action is sufficient to state that they have taken reasonable care. Case law related to the due diligence defence is limited, but as previously discussed in this column, it suggests that simply relying on a supplier's assurance may not be enough.
2. What does the claim mean to consumers?
A true claim can still be misleading to consumers. For example, CFIA guidance addresses "false uniqueness" claims. If a product is preservative-free this may be a truthful claim; however, if the type of product doesn't typically have preservatives, the claim is misleading because it implies a benefit in comparison to other similar products.
When developing claims, consider how consumers may interpret and understand them. Continuing with the cage-free eggs example, what does "cage-free" mean to consumers? Does this claim imply the chickens are allowed to roam freely, or can they be confined in an enclosure? Do consumers believe the laying hens have access to the outdoors?
It is risky for companies to simply assume consumers will understand a claim in the intended manner. When it comes to due diligence on potentially misleading claims, taking reasonable care may include conducting focus groups or other market research on what the claim means to consumers, and considering how to present sufficient information to avoid a misleading impression about a product's quality, value or merit.
Until further guidance or case law sheds light on what is "reasonable care" with respect to false or misleading food claims, it is up to companies to consider whether their practices may be sufficient to found a due diligence defence.
Prepared with assistance from Nathan Piché.
This article originally appeared in Food in Canada.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
