Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
New legislation cracks down on misleading terminology
Article Type: Corporate law outlook From: Strategic Direction, Volume 24, Issue 8.
Katherine Southby Katherine Southby is Regulatory Senior Solicitor at Bradford and Leeds-based law firm Gordons LLP.
This year is proving to be a tricky one for retailers looking to promote their wares. In the food industry the Food Standards Agency (FSA) is proposing changes to the way in which certain descriptive words can be applied to food products that could affect the way in which products are promoted.
Some initial guidance was issued five years ago, but since then there has been a burgeoning of advertising and promotional material using words such as “natural” “home-made” “farmhouse” and “pure”. The FSA’s concern is that since their first set of guidance in 2002, some of these terms have effectively become meaningless, through being inappropriately or inaccurately applied. The suggestion is that “fresh” should be restricted only to products that have not been processed or are being sold within a short time of harvesting. Ubiquitous phrases such as “garden fresh”, “oven fresh” or “ocean fresh” are set to go under the new proposals.
They also accept that consumer understanding of some terms may have shifted and new terms have come into use, with some existing terms being used in new ways and therefore the guidance needs to be updated to reflect this.
In particular the proposed guidance will set out the way in which businesses can advertise using terms such as “farmhouse, handmade, quality, selected, premium” and “finest” and “best”. This will include some, at best, esoteric distinctions between these words, including foods which can and cannot be mass-produced or factory-made, based on what the FSA consider to be the public’s expectations.
It will also alter the current guidelines on the use of terms such as “traditional, original, authentic, real, genuine” and “home-made”.
Food retailers and manufacturers who currently rely on these words in their marketing and advertising need to be aware of the shifting climate, and be ready to adjust their campaigns as appropriate when these proposals become formalised which is expected to be in the next few months.
In addition to these guidelines the Consumer Protection from Unfair Trading Regulations 2007 are due to come into force on May 26, 2008, with new rules designed to clamp down on unfair sales and marketing practices, and introduce an outright ban on 31 specific sales and marketing techniques. This will affect not just the food industry but also every sector of business that deals with consumers.
The overall aim is to outlaw misleading practices, and aggressive sales techniques such as adverts that leave out all-important information, “too-good-to-be-true promises” and high pressure or harassing door to door selling. However, some businesses are braced for a rocky road ahead, with controversy raging over the use of the word “free”.
The regulations prevent companies from “describing a product as gratis, free, without charge, or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice or paying for the delivery of the item”. Some in the retail trade have suggested this sounds the death knell for “Buy One Get One Free” offer or BOGOF promotions, although curiously ”Two for the Price of One” would not be caught by the regulations. Similarly fears have been raised that ”free gifts” with magazines or other products will not be able to be promoted as such, because the customer has to purchase the magazine itself.
As with all new regulations, the reality will only become clear once the regulations are in force and operating in practice. However, it seems unlikely that the BOGOF deal or magazine promotion will be the first target, when the regulations themselves are clearly aimed at so called “free” gifts that require subscription to another product, or use of a premium rate phone line, in order to obtain them.
One sector that has already been warned about the impact of the impending regulations is theatrical promoters. The regulations will ban promotions that are “likely to deceive the average consumer even if the information is correct”, if that information is likely to encourage someone to purchase a ticket.
The classic scenario is the selective editing of unfavourable review comments into favourable ones in a recent example the theatrical hoarding stated that the reviewer had praised the production’s “energy, razzmatazz and technical wizardry”, when in fact the review by Sean O’Hagan for The Observer had read “I couldn’t help feeling that, for all the energy, razzmatazz and technical wizardry, the audience had been short-changed.” Under the new regulations this is likely to be a criminal offence, and local councils will consider taking legal action if it was felt that theatergoers were buying tickets because of misleading endorsements.
As the dust settles on the new regulatory climate, retailers, and promoters are advised to tread a careful path through “advertising puffery”, to avoid unwittingly being on the wrong side of the new linguistic restrictions, and ultimately on the wrong side of the law.
If you have any questions about the “politics of promotion” or would like more information about the changes in FSA legislation and the Consumer Protection from Unfair Trading Regulations 2007 please contact Katherine Southby or another member of the Gordons regulatory law team on 0845 273 3080.
Issued on behalf of Gordons LLP by Radiant. For further information please contact Rob Smith (Tel: 0113 394 4610, Mobile: 07840 677534, E-mail: email@example.com) or Tracy Milnes (Tel: 0113 394 4611, Mobile: 07809 364975, E-mail: firstname.lastname@example.org).