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New Zealand-based dairy firm Milkio Foods has been fined for using imported Indian butter in products labelled as locally produced.

The firm has been fined NZD 420,000 (approx. $261,601) due to misleading claims such as “100% Pure New Zealand,” despite importing the core ingredient from India. The Hamilton-based company was founded in 2016 and produces ghee products.

Milkio Foods pleaded guilty to 15 breaches of the Fair Trading Act for making false representations about the country-of-origin of the butter used in its ghee products and using the FernMark logo and license number without proper authorisation.

According to the New Zealand Commerce Commission, Milkio used ‘false and incomplete’ information to retain approval to use the FernMark logo and license number, which is a trusted symbol used internationally to identify products made in New Zealand. Judge Thomas Ingram referred to the use of FernMark as the “cherry on top of Milkio’s brand positioning strategy…intended to provide an additional and unassailable layer of quality assurance to the consumer.”

In deciding the penalty amount, Judge Ingram emphasised the significant damage the misrepresentations could do to the New Zealand dairy industry, noting that the damage was “not merely to consumers, but also to other producers who rely upon ‘brand New Zealand’ in connection with sales of dairy products”.

The case was referred to the Commerce Commission by New Zealand's Ministry of Primary Industries. Vanessa Horne, general manager of fair trading at New Zealand Commerce Commission said that this was an important case for the Commission to prosecute due to the global value of New Zealand’s export brand.

Horne said: “New Zealand has built an international reputation for high quality dairy products, which underpins the value of our dairy industry and exports. Milkio took advantage of this reputation to promote its own products through the use of descriptions like ‘from the clean green pasture-based dairy farms in New Zealand,’ and ‘produced and manufactured in pristine New Zealand’ despite some of its products using imported butter from India.”

“This conviction should serve as a warning to others who may be looking to falsely claim the New Zealand brand,” Horne added. The Commission will act to protect consumers and businesses who are upholding the requirements of the Fair Trading Act for accurate information that can be backed up by producers and retailers.

“In this case the claimed level of negligence or carelessness reaches a level that might fairly be described as willful blindness, perhaps to the point of ‘commercial sleepwalking’,” Judge Ingram concluded.

FoodBev has approached Milkio Foods for comment.

Top image: ©Milkio Foods

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