A company that manufactured and sold a calf feed that did not meet its advertised specifications has pleaded guilty to eight charges of breaching the Fair Trading Act. Mainfeeds Limited (formerly known as PCL Limited) has been fined $125,000 in the Auckland District Court today.

>From June 2006 until June 2008, Mainfeeds described the product called Finish Up as a ‘superior 16% protein calf feed' and as ‘a high energy nutritionally balanced feed'. However, between July 2007 and February 2008, Mainfeeds changed the Finish Up recipe and the resulting product contained a reduced amount of crude protein and an increased amount of salt, readily fermentable carbohydrate and crude fibre. The changes to Finish Up meant the claims made about the product were no longer accurate and at times the quality of the calf feed was diminished.

Through their own quality control measures, Mainfeeds was aware that its Finish Up product no longer met the advertised specifications, but they did not alter the claims made on the packaging. They also did not alert their suppliers or consumers about the issue.

"To ensure compliance with the Fair Trading Act, businesses must make sure that any claims they make about their products are accurate and not misleading. Businesses need to ensure that they have effective compliance programmes in place to allow them to identify and fix potential breaches of the Act," said Kate Morrison, Commerce Commission General Manager Enforcement. "Misleading information not only affects consumers, but may damage other businesses competing in the same market."

In sentencing, Judge Kiernan noted that the offending had the potential for serious and far reaching consequences, particularly given that farming is a key industry in New Zealand.

In mitigation, Her Honour noted that Mainfeeds had acknowledged its culpability by pleading guilty, and had made attempts to change the formula when it became aware of the problems. She also noted that Mainfeeds cooperated with the Commission, had no previous convictions and had reimbursed those farmers who complained about the product.

The Commission's investigation was triggered by a complaint from a farmer who noticed that his 2007 calves rejected Finish Up, when he had not experienced the same problem in 2006.

Background
The Fair Trading Act. Breaches of the Fair Trading Act may result in prosecution in Court. Companies found guilty of breaching provisions of the Fair Trading Act may be fined up to $200,000 and individuals up to $60,000. Only the courts can decide if a representation has breached the Fair Trading Act.

Section 10 of the Act prohibits misleading conduct in relation to goods and provides that:
"No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods."

Mainfeeds Limited is a duly incorporated company. It was first incorporated in 1993 under the name PCL Industries Limited (PCL). In June 2008 the Australian Barley Board purchased the business of PCL and created a new company, PCL Feeds Limited. The former owner of PCL, Mainland Poultry Limited, then changed the name of PCL to Mainfeeds Limited. This prosecution did not involve PCL Feeds Limited or any product manufactured or produced by that company.

Finish Up was a concentrate calf feed which is designed for weaning calves at approximately five-six weeks to their finishing weight. The concentrate is in pellet form and recommended to be fed daily in quantities of two to five kilograms.

Finish Up was sold throughout New Zealand through RD1 retail outlets. From July 2007 to February 2008, approximately 1336 tonnes of Finish Up were manufactured and sold.

ENDS