Going 'natural' – when product claims are artificial

Articles Written by Sar Katdare (Partner)

Key takeaways

A recent Federal Court decision provides further guidance on the use of the word 'natural' in product branding or advertising.

In September 2017, the Federal Court found that supermarket chain, Aldi, had engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (ACL) by using the word “natural” in relation to its haircare product line. 

The case is important because it:

  • provides further guidance on the use of the word “natural” in a branding or advertising sense;
  • confirms that the ordinary meaning of the word to the relevant audience is relevant rather than the meaning given to the word by experts;
  • limits the use of “natural” to describe products which contain wholly or substantially natural ingredients rather than processed or manufactured ingredients; and
  • suggests that a product would not be considered natural if water was the only or predominant natural ingredient.

Facts of the case

Moroccanoil Israel Ltd (MIL), a founder and global producer of a range of hair and skincare products centred on argan oil, brought several claims under the ACL in relation to Aldi’s similar product line labelled “PROTANE NATURALS”.

In addition to some IP allegations, MIL alleged:

  • The design of the Aldi product range was so similar to MIL that it appeared that the products were being sold and promoted by Aldi on behalf of MIL (when this was not the case).
  • The use of ‘naturals’ on the main and rear panels of the products and on in-store advertising created a false representation that the products contained substantially or wholly natural ingredients (when they did not); and
  • The use of the words ‘argan oil’ on and in association with the Aldi product range generated a false representation as to the performance benefits of the argan oil used in the products. 

What did the Court say?

In relation to MIL’s first claim, the Court found that while Aldi did intentionally adopt a similar design for its product range, key differences between MIL and the Aldi range including the absence of MIL’s branding symbol ‘M’ meant that Aldi’s conduct did not amount to misleading and deceptive conduct. The Court held that similarities as well as differences between products must be considered when determining if a reasonable consumer is likely to be misled.

In relation to MIL’s second claim, the Court found that by promoting, selling and advertising each of the haircare products in conjunction with the word ‘naturals’, Aldi represented to consumers that each of the products contained wholly or substantially, natural ingredients when this was not true.

In relation to MIL’s third claim, the Court found that the use of the ‘argan oil’ on and in association with the products amounted to a false representation about the performance benefits of that ingredient.

Going 'natural'?

Although expert scientific evidence was presented to the Court in relation to the meaning of ‘natural’ and ‘natural ingredients’, the Court considered that ‘naturals’ should be assessed in the ordinary context of what consumers would read into that word rather than technical scientific definitions.

The Court accordingly referred to the ordinary dictionary meaning of the word ‘natural’ stating that it meant ‘existing or formed by nature; not artificial’. As Aldi’s use of the word ‘naturals’ referred to the final ingredients used in the product, the Court held that consumers would consider that product wholly or substantially contained natural rather than processed or manufactured ingredients. The Court stated that ‘there is no logical reason why a trader would choose to call a product line ‘naturals’ unless it intended to convey to consumers that the product was ‘natural’ or was comprised of substantially natural ingredients’.

The Court further stated that products that are chemically altered or naturally derived due to a synthetic modification are not natural products and products would not be considered natural if water was the only or predominant natural ingredient.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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