Consumer Protection Act Brief – 25/08/2010

25 August 2010|In Consumer Protection Act Briefs

In this issue:

  • Delay likely for Consumer Act implementation
  • Largest egg recall in US history
  • Vitaminwater misleading the market

Delay likely for Consumer Act implementation

Nomfundo Maseti, Chief Director of Policy and Legislation at the Department of Trade and Industry, said that a postponement of the Consumer Protection Act (“The Act”) is “highly probably”. The Act, expected to be effective within two months, has a number of positions and key elements to finalise before it is implemented. Regulations that provide guidelines on its implementation have a month long comment period following being published, which is only scheduled for the beginning of September. Vital roles within the structure including the position of Commissioner as well as Deputy Commissioner of the National Consumer Commission, are still open for application until the end of August. Maseti said regarding the implementation, “We cannot exclude the possibility that it will be postponed.”

Largest egg recall in US history

Two large egg producers, Wright Country Egg and Hillandale Farms, have had to recall 500 million eggs due to a nationwide outbreak of Salmonella enteritidis. These two companies have a vast share in the marketplace (there are only 192 large egg companies owning 95% of laying hens in the US), as well as a complex distribution chain. These eggs are sold and repackaged by wholesalers and distributors. Patty Lovera, Assistant Director of Food and Water Watch, a food safety organsation said, “I don’t think people have any idea when they see all these brand names in the stores that so many are coming from the same place,” adding, “It raises the stakes – if one company is doing something wrong, it affects a lot of food.” The recall has raised concerns that these mega-producers have been operating for 20 years almost unregulated. Director of the Food Policy Institute at the Consumer Federation of America says that although the Food and Drug Administration has done a good job handling the recall, the agency needs more authority to prevent future outbreaks.

Vitaminwater misleading the market

The Center for Science in the Public Interest (“CSPI”) achieved victory when Judge John Gleeson of the US District Court in Brooklyn, rejected Coca-Cola’s motion to dismiss the case against them. CSPI claim that Coke is violating consumer-protection laws with its Vitaminwater brand, indicating that the sugar content (33 grams) completely offsets any vitamins or water in the product. The health benefits advertised, and the brand name indicates that Vitaminwater is made up of only vitamins and water, misleading the consumer. Coke, who bought the Vitaminwater product from Glaceau for $4.2 billion, have said, “Vitaminwater is a great tasting, hydrating beverage with essential vitamins and water – and labels clearly showing ingredients and calorie content.” If this case does go to trial, the judge will rule whether the Vitaminwater name is in fact, legal. Steve Gardner, Chief Litigator for CSPI said, “Consumers shouldn’t have to assume that the front of a label is a lie. You cannot deceive in the big print and tell the truth later.” Coke responded to the judges ruling saying, “We believe plaintiff’s claims are without merit and will ultimately be rejected.”

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