Yoghurt Story fined for false claims

Yoghurt Story and Frozen Yoghurt have each been fined $35,000 in the Auckland District Court for misleading claims about their products, although the judge said the fine would have been $270,000 if the companies weren’t in liquidation.

When the Commerce Commission began investigating Yoghurt Story the business had 22 stores but that has now reduced to 10.

NBR first reported the financial meltdown of the Yoghurt Story in August last year. Founder Shaun Son was bankrupted in January.

The charges, brought under the Fair Trading Act, were for promoting frozen yoghurt products despite them not containing yoghurt and for misleading claims about their health benefits.

The companies pleaded not guilty.

The Commerce Commission says Yoghurt Story’s products misleadingly claimed they would:

• Increase your immune system;
• Lower the risk of subsequent heart disease and diabetes;
• Prevent infections once  immunity is strong. 

The watchdog says Justice David Sharp agreed the products were not yoghurt as defined by the Australia New Zealand Food Standard and didn’t have the claimed health benefits.

“The defendants’ conduct was a cynical attempt to take advantage of consumers’ desire to make healthier food choices. The defendants themselves considered the product to be more akin to an ice cream product, yet they decided to call their stores ‘Yoghurt Story’ because it was more attractive to consumers than calling it ’Ice Cream Story,” he said.

The judge added the health claims were a “significant departure from the truth.
“The product simply was not yoghurt. The samples taken showed the product provided rarely met with its description,” he said.

Commissioner Anna Rawlings said the case was important because consumers rely on the information they are provided by businesses when making decisions about which products to buy.

“In this case the health claims made by the companies were not supported by scientific justification and the product was not what it was marketed to be,” she said.
“Where any trader makes claims about the health benefits of a product, we expect they will have appropriate research to justify the claim. This is one of a number of cases that the commission has taken which seeks to protect consumers from misleading information about the products they are buying.”