On Friday 25 May 2012, Tracey J of the Federal Court in Melbourne delivered his judgment in Swisse Vitamins Pty Ltd v The Complaints Resolution Panel1. The proceedings related to a decision by the Complaints Resolution Panel (the Panel) that advertisements published by Swisse Vitamins (Swisse) were in contravention of the Therapeutic Goods Administration Code (the Code).
In a decision dated 5 March 2012, the Panel had made requests that, first, Swisse withdraw these advertisements and, secondly, that Swisse withdraw a number of specific representations about its products (the Panel's Decision).
Whilst the Panel's Decision has been unavailable to the public since Swisse's successful application to the Federal Court on 9 March 2012 to have it removed from the Panel's website (and it has since been set aside by Tracey J), it is clear that the Panel has strong concerns in respect of advertisements which include claims which relate to:
- the efficacy of a product;
- comparisons of the use of the advertised product with use of a competing product;
- the benefits of using the advertised product (when compared with no use of the product);
- scientific testing of a product; or
- research undertaken by the product's manufacturer.
The relevance of these proceedings is twofold. First, the Panel's Decision, although set aside, gives an indication as to how the Panel views claims made in advertisements for therapeutic products. Given the size and growth of the supplementary health products industry in Australia, worth an estimated $1.4bn after growing 7% in 2011 with Swisse itself reporting a 131% rise in net profit for the year ended June 20112, it is likely that the Panel's concerns about claims made in therapeutic goods advertisements will be of interest to the health and wellness industry, consumers and regulators alike.
Accordingly, the Panel's future consideration of complaints in respect of therapeutic goods advertisements has the potential to change the manner in which Swisse and any other company whose products are regulated by the Therapeutic Goods Act 1989 (Cth) (the Act) advertise their products.
It is also likely that regulators who deal with complaints relating to the advertisement of health related products which do not fall under the Panel's jurisdiction, for example, health foods, will also be interested in these proceedings and the Panel's Decision. This is particularly relevant given the growing enthusiasm of Australian consumers for health products generally and the often high-profile marketing campaigns used to promote such products.
Further, the strength of the Panel's concerns is emphasised by the fact that the Panel not only requested certain advertisements be withdrawn, but also that certain representations which are not necessarily specific to any particular advertisement, be withdrawn. Consideration of specific representations is likely to add an additional burden for marketers targeting health conscious consumers.
Two complaints were received by the Panel in late 2011. They related to a number of advertisements relating to Swisse's products (the Complaints). The Complaints were focused on:
- Swisse's slogan "You'll feel better on Swisse" (the Slogan); and
- Swisse's representations that its products had "proven results".
The Complaints alleged that Swisse had breached the following Code requirements:
- an advertisement must only contain correct and balanced statements which the publisher has already verified3;
- an advertisement must not be likely to arouse unwarranted and unrealistic expectations of product effectiveness4;
- an advertisement must not be likely to mislead, directly or by implication through emphasis, comparisons, contrasts or omissions5;
- an advertisement must not contain the claim that it is effective in all cases6; and
- a comparative advertisement must be balanced and must not be misleading or likely to be misleading7.
The Therapeutic Goods Regulations 1990 (Cth) (the Regulations) required the Panel to consider the Complaints and decide whether they were justified. The Panel was also required to give notice of the complaints to the person allegedly responsible, and to invite this person to send written submissions to the Panel, along with any supporting documentation.
The Panel sent Swisse a copy of the Complaints, in addition to a letter setting out the Panel's powers under the Code. Swisse was invited to respond by making submissions.
Swisse sent the Panel a submission in which it "provided a detailed response to each of allegations contained in the complaints"8. Swisse's submission included:
- a defence of its Slogan, submitting that the statement was branding or marketing speak. Swisse also denied any connection between the Slogan and the efficacy of the products;
- a defence of its claim that some of its products were "clinically proven" by producing a series of reports on clinical trials; and
- justification of its claim that its products were "based on over 25 years of research".
The Panel's Decision
The Panel found each of the advertisements which were subject of the Complaints breached one or more of the Code's provisions. The Panel requested that Swisse withdraw these advertisements and that Swisse withdraw specific representations in respect of 11 different products.
However, the Panel found that these breaches existed predominately due to specific representations not mentioned in the complaints. (It was these representations which the Panel requested be withdrawn.)
- the Women's Ulitvite product can improve the symptoms associated with PMS by 50 percent, in the absence of disclosure that a placebo reduced the same symptoms by 28.6% percent;
- the Ultiboost Inner Balance product can maintain the balance of friendly flora in the body, help maintain a healthy digestive system, enhances the body's natural immune defence or is "scientifically shown to" do so, or is "one of the most potent probiotics products you can buy"; and
- the Ultiboost Liver Detox can relieve feelings of "sluggishness", offer benefits to consumers who have drunk alcohol and support a healthy liver, detoxify, or relieve indigestion or bloating.
The Panel's responses to the main allegations in the Complaints are set out below.
"You'll feel better on Swisse"
The Panel found that the Slogan would be interpreted as "mere puffery" by a reasonable consumer where it was used in isolation and not in connection with individual products or specific claims of health benefits.
Importantly, however, the Panel considered that the Slogan was likely to cause a different impression if it were used in an advertisement alongside claims about product benefits which were unsubstantiated or misleading. In this context, the Slogan would also likely be unsubstantiated or misleading10. However, the Panel's reasoning in respect of this finding is unclear. We would suggest that the Slogan itself would not cease being puffery simply because it is used in the same advertisement as a claim about product benefits.
"Proven results"/ "Clinically proven"
The Panel found that Swisse had breached the requirement that an advertisement must only contain correct and balanced statements which the publisher has already verified in respect of its use of the term "clinically proven" in the advertisements for the Ultivite products. The Panel held that, whilst the study which Swisse had referred to could be regarded as evidence for claims about the Men's Ulitive product, the Panel noted that the small size of this study meant that it could not support claims as strong as "clinically proven"11.
However, it is unclear from the extracts of the Panel's Decision in Tracey J's judgement what size of a study is required to support claims such as "clinically proven".
Swisse initiated proceedings in the Federal Court to appeal the Panel's Decision.
The Federal Court Decision
Before the Federal Court, Swisse submitted that the Panel had made a series of adverse findings against Swisse without first giving Swisse the opportunity to respond to the relevant matters. Swisse submitted that this had occurred because the terms of the Complaints were not sufficiently clear to alert Swisse to the matters which the Panel was considering, or because the Panel had made adverse findings despite the relevant allegations not being made in the Complaints.12
Tracey J held that the Panel was required both by the Code and at common law to provide Swisse with notice of any critical issue on which Panel's decisions may turn13. Whilst the Panel has the power to deal with a matter that is not mentioned in a complaint if it is satisfied that the advertisement or generic information to which the complaint relates may contravene the Act, the Regulations or the Code in some other way, the Regulations require that the Panel gives written notice of its decision to do so to the person apparently responsible.14
Whilst the Panel had provided Swisse with copies of the complaints, Tracey J came to the view that the Panel's Decision in its entirety would have to be set aside, including the requests that Swisse withdraw the advertisements it had been provided with copies of, as the terms the Panel used to frame its requests inextricably linked all the requests, and the decisions antecedent to these requests, together.
To illustrate this linkage, Tracey J referred to the Panel's view that, whilst claims relating to the Slogan were not substantiated, the Slogan was likely to be misleading if used in conjunction with specific claims relating to the efficacy of a particular product. Accordingly, Tracey J held that all the requests made by the Panel should be set aside.
Whilst Swisse continued to advertise in a high profile manner throughout the proceedings, including in the period during which Tracey J's judgement was reserved (and Swisse emphasised this in a media release issued the day Tracey J's judgement was delivered15), Swisse's much published recent TV commercials featuring Delta Goodrem16, filmed in early May 201217, make few claims in respect of the Swisse Body range they are promoting. Instead, Swisse appears to be relying on little more than its product's association with Goodrem – a complete departure from the style of the claim-heavy, celebrity endorsed advertisements which are the subjects of the Complaints.18
It is unclear whether this departure is in response to the Panel's Decision. The fact that Swisse otherwise continued its advertising campaign in the same manner as it did prior to the proceedings suggest that this departure is not in response to the Panel's Decision.
However, the Panel's Decision can be taken as an indication of the Panel's future consideration of complaints as well as the Panel's attitude towards the advertisement of therapeutic products generally. Accordingly, Swisse, and any other company targeting health conscious consumers, may have to alter the manner in which they advertise by, for example:
- ensuring that any claims about products are verified and are not misleading;
- investing in further research to provide stronger support for their claims;
- ensuring that any slogans they use would be considered mere marketing speak by consumers; and/or
- relying on celebrity endorsements to market their products, without the celebrity voicing any claims about products, unless the claims are verified and are not misleading (or the claims are truthfully the personal opinion of the celebrity and are marketed as such).
1 2012] FCA 536
2 Rebecca Urban, 'Swisse in the pink as vitamin group's profit sours', The Australian, 22 March 2012. Accessed via: http://www.theaustralian.com.au/business/companies/swisse-in-the-pink-as-vitamin-groups-profit-soars/story-fn91v9q3-1226306619615 on 7 June 2012.
3 S 4(1)(b) of the Therapeutic Goods Code (the Code).
4 S 4(2)(a) of the Code.
5 S 4(2)(c) of the Code.
6 S 4(2)(h) of the Code.
7 S 4(5) of the Code.
8 Swisse at 22.
9 Id at 31.
10 Id at 27.
11 Id at 28.
12 Id at 63.
13 Swisse, above n 14.
14 Reg 42ZCAH of the Regulations .
15 Swisse Vitamins Pty Ltd, "A welcome decision", 25 May 2012. Accessed via http://www.swisse.com/about/media/press-releases on 3 June 2012.
16 For example: http://www.youtube.com/watch?v=-lCaizbqko8. Accessed on 3 June 2012.
17 Amy Christie and Joel Harris, "Delta Goodrem films new commercial for Swisse Vitamins at Sydney's Little Bay", The Daily Telegraph, 8 May 2012. Accessed via http://www.dailytelegraph.com.au/entertainment/sydney-confidential/delta-goodrem-films-new-commercial-for-swisse-vitamins-at-sydneys-little-bay/story-e6frewz0-1226349287707 on 3 June 2012.
18 For example: Swisse at 39.
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